Industry reactions to the Chancellor’s Budget

On Wednesday (11th March), Chancellor Rishi Sunak MP delivered the Government’s first budget since October 2018, announcing tax and spending plans for the year ahead.

Specifically of interest to the UK tech channel, the budget included a £3,000 cash grant for eligible small business, and £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places.

Here are some thoughts from various parts of the industry on the budget’s impact on the UK tech, retail and business channels:

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, on the business rates review: 

“All of us benefit from a diversity of retailers, both big and small, in our local communities. This budget does little for larger retailers – offering a string of cost increases with no respite in the short term. However, on the upcoming review, the Chancellor has clearly listened to the retail industry and we welcome his recognition that the overall burden of business rates must fall.

“The Chancellor has shown he is capable of making bold decisions, this will be critical to the upcoming review of the broken business rate system. We welcome the stated objectives of reducing the rates burden on business, something we have been calling for, and the inclusion of changes to transitional relief as an option to provide short-term relief from April 2021. It is vital that the burden is reduced for all retailers – large and small – if it is to promote further investment in productivity growth and higher skilled, better paid jobs. We hope this open-minded approach carries through to implementing positive changes once the review has concluded later this year.

“Despite announcing his support for British business, the Chancellor has failed to provide any relief for larger retailers, who employ the majority of the industry’s 3 million workers and currently foot most of the industry’s £7.5bn business rates bill. In April, these retailers will face yet another rise in business rates across England, piling on even more pressure on shops at a time when they are squeezed by lower demand and increasing costs arising from coronavirus.”

Daniel Todaro, Managing Director of Gekko, on the business rate tax cut:

“It’s a fantastic measure for independent and small format retailers and I applaud this government for taking the initiative however this does nothing to support large format stores, both multiples and independents, whom as large scale employers require assistance to remain a major employer and continue to support the national and micro economies they support. In addition, the high street and towns cannot survive if these vast retail premises lie idle as ghost stores who’s only destiny is to become more ‘luxury apartments’ which diminishes the central business district every town needs to retain in order to be a community.”

John Auckland, Virgin StartUp’s crowdfunding trainer and founder of TribeFirst, on how the budget will affect entrepreneurs thinking of crowdfunding:

“From the start of the new tax year, the National Insurance Contributions Employment Allowance for small businesses will increase by £1,000 a year, from £3,000 to £4,000. It’s worth noting that this will affect your SEIS limits, as the £150k maximum is restricted to all state aid taken during the two-year SEIS limit.

“The ‘temporary coronavirus business interruption loan scheme’ might provide bricks and mortar startups and growth companies, or those in hospitality, travel, leisure and retail, some extra working capital of up to £1.2m to get them through the tough times. Note that this will sit on your balance sheet as debt, and crowdfunding investors don’t like to invest in paying back existing debt.

“Also to help SMEs, any company with fewer than 250 employees will get help from the government to cover statutory sick pay for employees who are off sick due to coronavirus.

“The EMI Scheme will be getting a review. EMIs are often used by founders to incentivise their team via options when they can’t afford to pay them the going rate for their work. The Government has announced that they will review the scheme “to ensure it provides support for high-growth companies to recruit and retain the best talent so they can scale up effectively, and examine whether more companies should be able to access the scheme.” This sounds positive to me, and suggests they plan to expand on the existing offering, rather than limit it.

“Knowledge-intensive businesses might enjoy greater investment opportunities with further clarification on how the new Knowledge Intensive (KI) funds will work. Hopefully more funds will be created off the back of these changes, providing more investment opportunities to investors with generous reliefs, and more liquidity to technical companies to help turbocharge their growth.”

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