As we head towards Budget 2014, which will take place on Wednesday 19 March, there is no denying the UK economy is in a better place than it was this time last year. GDP growth of 2.4 per cent is predicted for this year and things are looking up, but does this mean that George Osborne will be providing dramatic tax cuts and reforms? Probably not…
In a speech to business leaders in Hong Kong last month, the Chancellor continued to voice caution, claiming that the UK’s economic recovery is not yet secure. With that in mind it is unlikely that huge tax cuts will be made. What we can perhaps expect is an emphasis on bolstering business in the UK, exports and encouraging new enterprise. We already know that the Funding for Lending Scheme is being re-focused away from mortgages and towards businesses, but what else could be announced?
Both the Confederation of British Industry (CBI) and Federation of Small Businesses (FSB) have put some ideas across. In his letter to Chancellor George Osborne, the CBI’s director-general John Cridland said that the Budget should:
- Ensure competitive energy costs for British business
- Ensure that our tax system supports investment and exports
- Support smaller and medium-sized businesses in accessing the finance they need to grow
- Speed up asset sales to fund future capital investment and take concerted action to boost housing supply
Suggestions include freezing the UK carbon price, continuing the maximum Annual Investment Allowance at £250,000 beyond its current deadline of January 2015 and making the Seed Enterprise Investment Scheme permanent. The FSB also says that reforms in key areas such as banking and energy are needed to support enterprise.
We will be reporting on the Budget live on 19 March. Please contact us to discuss any issues that may arise.