Chancellor Jeremy Hunt will deliver the Autumn Statement on Wednesday (November 22), with businesses across the UK waiting to hear the Government's plans to grow the economy and tackle the cost-of-living crisis.
The Chancellor has already hinted at new measures to promote business investment and address labour supply issues. In a speech in the House of Commons he will also address MPs on the latest economic and fiscal forecast from the Office for Budget Responsibility.
Ahead of his announcement companies and business groups across the South West have been telling BusinessLive what they hope will be produced from the famous red ‘budget box’.
Hargreaves Lansdown
The FTSE 100 financial services firm has called for an increase to the amount that can be invested into an ISA savings account during a tax year, which currently stands at £20,000. The Bristol-based business said this allowance was last changed in 2017, so would need to rise to more than £25,000, just to keep pace with inflation.
HL’s head of personal finance Sarah Coles said: “A bigger allowance would be a shot in the arm for investors in the South West, who have been battered by cuts in the allowances for dividend tax and capital gains tax. Given that we know UK ISA investors favour home markets, it would also boost investment in UK companies at a stroke.”
Ms Coles also suggested the government halt planned threshold cuts for capital gains tax and dividend tax, to encourage its growth agenda and “ease pressure” on investors.
Albert Goodman
The accountancy firm is hoping Mr Hunt will provide some "much-needed certainty" surrounding research and development tax relief for tech companies across the region.
The firm's Bristol-based tax specialist Sam Wood wants to see the Chancellor take further steps to encourage innovation. Mr Wood said: "We can all be proud of the companies in the South West that are leading the way in the tech, aerospace, life sciences and software sectors. But I know from listening to these innovators that the changes to R&D tax incentives are starting to hamper plans for investment and growth."
He added: “The relief available for small and medium sized businesses (SMEs) isn't as generous as it used to be and the process for accessing relief is becoming far more complicated.
“Furthermore, the proposed changes to merge the small and large business R&D tax relief systems together under a universal system do not provide enough clarity about who in the R&D supply chain should be making the claim for tax relief."
The Somerset-headquartered firm is also urging the Chancellor to provide a boost to emerging businesses following warnings that they need better access to finance.
Huboo
Founded at a Safestore in Bath in 2017, the Bristol-based ecommerce fulfilment firm now employs more than 700 people globally, across the UK, Europe, Turkey and the US.
The fast-growing firm was previously identified by a government report as one of the firms in Bristol’s burgeoning tech sector capable of attaining a ‘unicorn’ valuation of more than $1bn over the coming years.
Huboo called on the Chancellor to outline a long-term growth strategy that went beyond the immediacy of tackling the cost of living crisis, and that prioritised skilling up the UK workforce. The firm’s chief financial officer Peter Edgar suggested the Apprenticeship Levy be raised from 0.5% to 1% to incentivise firms to invest in skills development and lay a clearer pathway towards higher-paying jobs.
Mr Edgar also called for greater recognition of the EU as a key trading partner, “regardless of the politics of Brexit”. Mr Edgar said: “One option that could provide a welcome economic boost would be introducing tax incentives for businesses investing in EU trade, similar to those we already have for R&D.
“Investment in job creation, overseas trade, and British entrepreneurship are all pivotal to our country’s future success. Yet each feels as though it has been relegated to a back-seat issue in recent times. The Autumn Statement is a chance for the Chancellor to put things right and set out a renewed, proactive, strategic business agenda."
Lloyds Bank
Amanda Dorel, the bank’s regional director for the South West, has said many businesses in the area are “optimistic” about their trading prospects despite a challenging economic environment, with its research suggesting around nine in ten firms are setting their sights on growth in the next six months.
Ms Dorel added: “That said, business leaders in the region will be keen to hear what the Chancellor announces in his Autumn Statement in the hopes that he will deliver measures to help them unlock the capital they need to invest in growth. For instance, many larger firms are hopeful the capital allowance changes announced in Spring will be made permanent.
“Whatever is announced on Wednesday, we’ll be by the side of businesses in the South West to help them access the funding and support they need to grow.”
Business West
One of the largest chambers of commerce in the UK, Bristol-based Business West works with more than 20,000 businesses across the South West.
The chamber’s Gloucestershire director Ian Mean called on the Chancellor to stimulate economic growth, and suggested that cutting business taxes could incentivise more companies to invest.
Mr Mean said: “It does look that a key benefit to business the Chancellor could make, would be to extend by one year - beyond 2026 - the full expensing scheme, which lets businesses deduct the full cost of investing in IT equipment, plant or machinery from their profits.
“Business needs some attractive incentives from government to grow and be more productive as inflation rates decrease. The Chancellor must now deliver on growth.”
Nationwide
The building society, which has its headquarters in Swindon, has called for measures to help first-time home buyers and savers.
Among the lender’s key asks are an independent review of the first-time buyer market, to come up with a plan to tackle “significant challenges” facing the housing sector. The company said these included the gap between income growth and house price growth, inadequate supply, the need for planning reforms and the impact of regulations on mortgage lending.
The mutual, which recently reported record member benefits and rising half year profits, has also suggested the reintroduction of the government’s ‘Help to Buy’ ISA savings account and an increase in the personal savings allowance threshold.
Director of mortgages and financial wellbeing Rachael Sinclair said: ‘‘Homeownership for many first-time buyers is a huge challenge. Reintroducing the Help to Buy ISA would make a big difference to building a deposit, while a review of the first-time buyer market would help determine the right solutions for helping people get a hope of their own.
“For savers, the personal savings allowance feels out of sync with interest rates and, if it is not increased, many more will be forced into paying tax at a time we need as much encouragement as possible to save.”
Ruby & White
Master butcher Dave Kelly, the co-founder of Ruby & White butchers on Whiteladies Road in Clifton, warned that the current level of corporation tax was putting many businesses “through the meat grinder”.
Mr Kelly said: “This Government needs the economy to start firing but it is doing little to support the typical SME, which is the backbone of the economy. The current tax regime is so punitive for small business owners that the profits you do make are immediately swallowed up.
“There's little left to reinvest, expand, hire staff and grow, which is what the economy needs. Whatever's announced in the Autumn Statement is likely to be short-lived anyway as the Tories have a mountain to climb if they're going to win the General Election.”
OnBuy
The fast-growing online marketplace has recently announced plans to set up its first websites serving overseas markets after securing investment from a global tech firm.
Cas Paton, the founder of the Bournemouth-headquartered e-commerce company, has called on the Chancellor to help businesses with rising costs to encourage investment in growth plans and product development, and in turn, stimulate the wider economy in the areas they operate in.
Mr Paton said: “Providing more support to businesses to help with non-inventory operating costs is an obvious, but important one. With the rise in utilities and the general cost of living, increased running costs reduces the amount that companies have to invest in their technology, growth and in some cases, to operate at all.
“We offer hybrid and remote working options to all of our employees out of choice, but for some companies there’s no option. If businesses are deciding to avoid having a physical premises simply because they can no longer afford the overheads, the wider economy suffers as it takes footfall away from the surrounding area, not to mention transport services and trades.”
Wiltshire Wealth
The Bradford-on-Avon financial planner’s founder Daniel Wiltshire has called on the Chancellor to reform the UK’s “archaic” business rates system.
Mr Wiltshire said: “It's turning our high streets into a wasteland of empty shops and hollowing out communities. It hands a huge advantage to the megalithic corporates that operate online and pay taxes offshore - we need a fair tax system fit for the 21st century.”
Time Finance
The Bath-based lender has provided funding solutions to more than 11,000 SMEs across the UK and the firm has called on the Chancellor to boost business confidence in the face of “rumbling uncertainty”. Inflation stood at 10.1% at the time of the Spring Budget, with the OBR predicting it would fall to 2.9% by the end of the year - it currently stands at 6.7%.
Time Finance’s chief executive Ed Rimmer said: “Things are looking up, but overheads remain high, growth is slower than hoped and ambitious plans get put on hold as a result. But this doesn’t need to be the reality. In January this year, the Chancellor gave an address at Bloomberg on the future of the UK economy, a speech full of promises of business confidence, ambition, growth and productivity. His aim was to create conditions where entrepreneurial risk takers can succeed, and we need to see more of this in this year’s Autumn Statement.”
Time Finance said a rumoured extension to business rates relief for retail, hospitality and leisure beyond next spring would be “welcome news” for those sectors, but added “a more universal approach” to helping businesses with outgoings was needed. The company welcomed a possible rise in the Living Wage and also called for more support for loss-making R&D SMEs and for firms and a skills investment to address workforce shortages in the UK’s key industries.
Mr Rimmer said: ”I’m a big believer in a self fulfilling prophecy; if we convince ourselves we are heading towards a recession, we make it all the more likely. On the other hand, there are many in the business community that will thrive with the right support in place. This Autumn I’d like to see the Government step up and support the risk-takers and entrepreneurs that will take our economy back into healthy growth.”
Osborne Clarke
The Bristol-founded international law firm has said while the UK tax burden is at its highest level for decades, immediate tax cuts “are not expected” with the Chancellor previously moving to rule them out.
Erika Jupe and Tracey Wright, Bristol-based partners with the firm, said Mr Hunt could, however, set out a path for future tax-cutting measures in the Autumn Statement, including on inheritance tax, though it added a headline grabbing rate cut may be saved for the Spring Budget ahead of next year’s General Election.
Osborine Clarke also said to look out for possible enhanced tax reliefs for SMEs spending on digital services, reform to Government research and development schemes, and green tax measures, such as a "green" stamp duty land tax (SDLT) measure, which would give an rebate to buyers who improve the energy efficiency of their home within two years of its purchase.
Ms Jupe and Ms Wright said: “The Autumn Statement will be challenging for the chancellor. With the UK still in a difficult economic position, he is unlikely to be able to announce any immediate tax cuts or generous giveaways.
“With Labour waiting in the wings and with Rachel Reeves already having given an indication of her and a potential future Labour government's tax measures, the Chancellor will no doubt wish, with a general election looming, he had more at his disposal.”
Manning Gee Investments
Independent financial advisor Samuel Gee is waiting with "some anticipation" to see what Mr Hunt will announce on Wednesday. The director of Bristol-based Manning Gee Investments is eager to hear what will be said about Corporation Tax, which presently stands as the Government's fourth-largest revenue source.
He said: "The recent surge in rates from 19% to 25% dampened any optimism within the business sector. However, with the latest inflation figures surprisingly better than expected, it does give the Chancellor a little more wriggle room. I would hope that while businesses are paying higher levels of taxes, other means are introduced to boost productivity, encourage investment and support economic growth."
Mr Gee added: "Targeted relief like a reduction in VAT for specific struggling sectors like hospitality, which in turn would boost spending and not be a major source of lost revenue for the Chancellor, could be one way of achieving this. However, while the inflation tight-rope continues to be navigated, I expect this will be limited."
