Nigel Roberts, Head of Information Display, LG Business Solutions comments:
“This latest modernisation drive will help the UK chart its leadership position.
“The discourse around technology, and specifically AI, is quickly changing – it’s moving beyond talking about the evolution of AI to the tangible benefits it can deliver to society.
“The public sector productivity plan will ensure the focus shifts to quickly capturing the real benefits emerging technologies like AI can deliver, such as how it can improve public services, healthcare, policing, and education. This will help the UK move to a place where AI can be designed and used in the service of people and enable the delivery of better and smarter lifestyles that are caring, empathetic, and authentic.”
Peter Turner, Chief Commercial Officer at TeamViewer:
“The changes outlined by the Chancellor to encourage people back into the workforce are undeniably positive. The lack of skilled workers in the UK and the high turnover in industries like retail and manufacturing means that finding and training new staff is a challenge. This focus on getting people back to work needs to be partnered with an investment in skills, particularly technology skills, or turnover rates will continue to be high.
This means prioritising training for those entering our vital industries, as well as reskilling individuals already in work to ensure they advance and feel valued in their roles. Technology, especially innovations like augmented reality, can greatly speed up on the job training, allow workers to progress faster and ultimately improve worker satisfaction. This ensures those re-entering the workforce have the support and skills they need for their roles quickly.”
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Rod Neale, CEO at Circular Computing says:
“The Chancellor’s new Public Sector Productivity Plan includes a £3.4bn windfall for the NHS, aimed at modernising IT systems and speeding up its digital transformation strategy. The move effectively doubles the previous level of support and promises a £35bn return on investment through a 1.9% boost to productivity.
“It’s a shot in the arm for the health service, but as the Chancellor said himself money alone won’t solve the productivity problem, the public sector must find ways to improve efficiency too.
“In 2022, Circular Computing provided 400 sustainably remanufactured Dell Laptops to King’s College Hospital Trust so they could train 12,000 frontline staff to use its updated Electronic Patient Records system. It was an excellent example of older technology being used to support the implementation of new, delivering improvements to productivity and cost-saving, all while reducing the environmental impact of investing in new technologies. I’d love to see more of this kind of initiative under this ambitious new plan.
“Beyond the NHS, it’s a shame we didn’t see anything from the Chancellor around the inclusion of second-hand assets in the scope of full expenses. We’d love to see businesses given more incentive to embrace the circular economy. The Green Industries Growth Accelerator programme hopes to help boost the supply chains of UK green manufacturing industries like carbon capture, nuclear, hydrogen, electricity networks & offshore wind, but it seems that circularity has fallen by the wayside.”
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Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting at AICPA & CIMA, together as the Association of International Certified Professional Accountants, said:
“We welcome the chancellor’s announcement of a public sector productivity plan, especially since it recognises the need for investment to produce these vital enhancements. It would have been good to see more action on increasing private sector productivity. The increase in VAT thresholds and extension of full capital expensing to leased equipment are steps in the right direction. The additional ISA allowance should increase the capital available for UK listed companies to invest, and the child benefit changes ought to improve the labour supply.”
“However, to increase productivity we need to upskill the workforce, and this focus was missing from the budget. We were hoping for reform of the apprenticeship levy to allow more companies, especially SMEs, take advantage of the funding. Further action on upskilling will be required by future administrations if we are to generate sustainable growth and build the high-wage, high-skill economy we all want to see.”
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Budget ‘hasn’t really moved us any closer to where we need to be’, says IEA Executive Director Commenting on the Budget, Tom Clougherty, Executive Director of the free market think tank, the Institute of Economic Affairs, said:
“Today’s Budget tax cuts will provide some relief from the rising cost of living, but ultimately won’t do much to revive the stagnating economy that lies behind most of our current woes.
“There is a strong fairness argument for the National Insurance reduction, which will partially offset the impact of frozen tax thresholds. And the long-term ambition to abolish National Insurance and simplify the way we tax earnings is a very welcome one – even if it doesn’t seem likely to come to fruition.
“The Chancellor’s changes to child benefit also went some way towards reducing the harm done by his predecessors. A more radical overhaul – including the planned shift to a household basis – can’t come soon enough.
“Cutting capital gains tax on residential properties is fine as far as it goes. But abolishing Stamp Duty Land Tax – or at least raising the threshold for homes to £1m – would have been a far better way to improve the UK’s antiquated and destructive property tax regime.
“This Budget didn’t really address the UK’s long-term fiscal challenges, particularly around the impact of an ageing population. On the other hand, it did highlight the absurdity of setting tax policy based on highly variable five-year debt forecasts. Fiscal rules should be a good thing, but the way we’re using them makes no sense at all.
“There’s no getting away from the fact that raising living standards in the long run depends on generating faster economic growth. And that means prioritising tax reforms with genuine pro-growth impact, fixing our broken planning system so that we can build more of everything, and accepting that we need to couple spending restraint with major reforms to public services.
“As always, there are good and bad things in this Budget. But if we take a broader view of economic policy, it hasn’t really moved us any closer to where we need to be.”
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Commenting on the Budget, Lewis Z. Liu, CEO Of Eigen Technologies said:
“I’m disappointed that the government has not reversed the cuts to the UK’s previously world-leading R&D tax credits regime. These cuts act as a tax on Founders and have already damaged the UK’s successful tech ecosystem that provides investment and high-paying jobs, and seriously undermines the Government’s ambition of making the UK a technology and science superpower by 2030. While it’s welcome that the Government is beginning to see the light and is establishing an expert advisory panel to further deliberate on this, the Chancellor needs to stop dragging his heels and support investment in innovation”.
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Personal tax thresholds
Glenn Collins, Head of Technical and Strategic Engagement at ACCA: “The November 2023 cut to National insurance at 2p to the pound was a somewhat surprising move for the Chancellor. Now, we have seen further cuts to National Insurance/income tax, at an additional 2p cut.While tax cuts are welcome relief to the pay packets of many, given that the tax burden in the UK remains so high and is on course to only climb higher, any cuts now will only have a minimal effect on the overall issues of the cost of living crisis and the drop in real-terms wages with the pressures of inflation.ACCA calls on the Chancellor to look at raising the personal allowance threshold, a move which would potentially put far more cash back into the pockets of the people over a 2p tax cut. Raising personal allowance thresholds would also reduce the risk of fiscal drag for the lowest earners, and could encourage more people into work as a result.”
HMRC services
Glenn Collins, Head of Technical and Strategic Engagement at ACCA said: “The Chancellor has announced today that he will provide HMRC with the ‘resources it needs’ to ensure fair payment of tax from all throughout the UK. What this announcement entails is yet to be qualified by the Chancellor, however it is worth reiterating that increased funding and resources is needed throughout HMRC so not to further add to the administrativeburden and uncertainty faced by compliant taxpayers and small businesses.
“ACCA hopes that our repeated calls for improvements to HMRC services will be heeded by the Chancellor without adding further burden to the many millions of law-abiding tax payers in this country.”
Capital allowances
Glenn Collins, Head of Technical and Strategic Engagement at ACCA said: “The move to include full expensing tax relief on leased assets is positive news and comes after numerous industry representations. The relief will be enable businesses to be more efficient by leasing assets to nurture productivity by getting the newest, cleanest and most efficient plant and machinery into the hands of business owners. It is disappointing no timeline is attached and we hope the draft legislation will be published and passed quickly.”
Public services
Alex Metcalfe, Head of Public Sector Policy said: “ACCA welcomes the Chancellor’s focus on public sector productivity, given the continued squeeze on public sector spending. Effective and efficient public services provide the framework for a thriving UK economy, including the provision of good-quality healthcare and responsive HMRC services. ACCA will be releasing a new report on public sector productivity later this year, as finance professionals working in public services must play a critical role in delivering sustainable gains in productivity.
“Recent global research by ACCA and the International Federation of Accountants shows that a professionalised public finance function increases access to decision-useful information, supporting good value for money in the provision of public services.”
VAT
Glenn Collins, Head of Technical and Strategic Engagement at ACCA said: “Increasing the VAT threshold to £90,000– the first increase in seven years and something ACCA had called for – is a shot in the arm for many small businesses dealing with increased costs, as well as removing what can sometimes be an artificial barrier to business growth. “We hope this will also improve HMRC’s speed in dealing with VAT registration and deregistration, .Hopefully these freed up resources canensure businesses also receive quicker VAT repayments they are owed.”
Child benefit
Jason Piper, Head of Tax and Business Law said: “The increased thresholds for HICBC will go some way to reducing its impact and the number of individuals having to file tax returns. The extended taper band will also temper the impact of the excessive marginal tax rates created by the current withdrawal mechanisms.
“The proposal to shift overall implementation to a household basis is more in line with the underlying policy, but is likely to introduce additional record keeping issues as living arrangements naturally shift over time (and rarely in line with tax years). However, with the requirement for a consultation period it is unlikely that we would see any changes here before the general election.”
Non domicile tax
Jason Piper, Head of Tax and Business Law said: “The domicile basis for income and inheritance taxes has long been an area of significant complexity, and reform is welcome.“The abolition of taxation based on domicile and a shift to more easily established residence basis should simplify the administration of these taxes.“As always with such a fundamental reform, the transitional measures will need to be designed carefully, as will mitigation of the inevitable risks of behaviour change in the short term.”
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Philip Brennan, Founder and MD at BusinessComparison comments:
“Business owners around the country are squeezed at the moment, with wages going up, and costs such as energy remaining high – so many will have been watching the Spring Budget closely.
“The 2 percent national insurance cut will give the average person £450 more a year, which is good news for businesses who rely on purchases from consumers, who may find themselves with a little more to spend.
“The Recovery Loan Scheme is being extended and renamed the Growth Guarantee Scheme, offering SMEs loans up to £2 million. This will hopefully increase small business leaders’ access to finance, helping them to grow their businesses.
“Many SMEs were hoping to see a reduction in VAT, especially those in the hospitality industry. The Night Time Industries Association (NTIA) has called for a VAT cut, as the trade body has seen many venues close recently due to struggling with costs. While we haven’t seen a VAT reduction, there is an increase in the VAT registration threshold from £85,000 to £90,000, which will reduce the number of small businesses who have to pay the tax.”
Full details of this year budget available from the BBC here: https://www.bbc.co.uk/news/live/uk-politics-68465603?xtor=ES-211-[70303_PANUK_DIV_10_NCA_THEBUDGET2024_RET_ABC]-20240306-[bbcnews_costoflivingbudget2024jeremyhuntnationalinsurancetax_newspolitics]
