Chancellor’s Autumn Statement: Your Views

 Cumbrian organisations react to Chancellor Jeremy Hunt's Autumn Statement.

Graham Lamont, Chief Executive at Lamont Pridmore

He said: “Despite a major emphasis on leveraging the current economic climate and creating opportunities for small businesses, policies within the Autumn Statement will place a heavy burden on SMEs in the coming months.

“Working people will be rightly supported through higher costs of living with rising wages and reduced NI contributions, but businesses seem poised to pay the price, particularly with no NI reductions to employer contributions.

“This is particularly true for sectors that rely heavily on labour or those that already operate with low profit margins.”

He welcomed the extension to ‘Full Expensing’ saying: “This extension will be hugely beneficial to manufacturing and related sectors, as SMEs that rely on investment in capital can suffer cash flow problems.”

He concluded: “While the Chancellor placed heavy emphasis on securing investment and growth, SMEs may not feel the benefit for a while yet.

“Employers will need to consider their cash flow carefully to avoid being hit by rising wages and NI contributions in order to reap future benefits of targeted support for key sectors.

“Furthermore, some sectors – such as professional services – will not benefit as significantly from upcoming investment projects or full expensing, so they will have to think carefully about optimising future financial plans.”

Suzanne Caldwell, Cumbria Chamber of Commerce

MD Suzanne Caldwell said: “The planning system represents one of the biggest strangleholds on business investment so it is positive to hear the announced improvements to the system, which should mean speeded up planning applications (albeit for higher fees). There was also mention of funding for high-quality nutrient mitigation schemes which should help to unlock housing developments.”

The Chamber also welcomed the news that ‘Full expensing’ was to become permanent giving businesses a certainty in their capital investment planning.

Suzanne said: “This was in place as a temporary policy allowing businesses to write off the cost of investment on qualifying plant and machinery in one go. For every pound a company invests, taxes are cut by up to 25p, running through to 2026. It’s great news that this is being made permanent, which should have a positive impact on investment.”

They said the news on business rates - freezing the small business multiplier for a further year and extending the 75% discount on business rates up to £110k for retail, hospitality and leisure businesses for another year – was positive but called for more action to be taken. They also said that abolishing mandatory Class 2 National Insurance for the self-employed and reducing Class 4 contributions for this group by 1 percentage point to 8%, would be good news for many but highlighted that for many the savings would have already been swallowed up by higher costs.

Mr Hunt also announced an increase in the National Living Wage from £10.42 to £11.44 per hour equating to an extra £1,800 for full time workers. Eligibility for the National Living Wage is also being extended by reducing the age threshold to 21-year-olds for the first time.

Becky Bowness, Armstrong Watson’s Head of Tax

She said: “We hoped for more support for small businesses but instead, we were surprised by the quantum of spending announced. The tax changes that were announced are unlikely to help our family-owned businesses. For example, as anticipated, full expensing for capital expenditure has been made permanent, however, there was already relief available for expenditure up to £1 million and so few family-owned businesses would spend more than this. This means the impact of this change is unlikely to provide much benefit.

“The merging of the R&D schemes will inevitably have a detrimental impact on SMEs albeit it should eradicate some abuse of the scheme.”

Brett Bennett, Accountancy & Tax Partner at robinson+co in Workington

He said: "The £20bn tax relief in business is welcome and reiterates the Government's focus on backing businesses and growth across the country. There has been considerable pressure and burden since the pandemic on SMEs and entrepreneurs, with costs rising and consumer spending decreasing.

It’s great to see the government has made attempts to cut tax given the burden of increased living costs over the last 18 months, however, the freezing of allowances and increasing of wages will mean that more people will be taxed at higher rates or become taxable in the coming years.”