The BPIF has said it welcomes a number of measures in this year’s Budget and is pleased that the Chancellor has listened to calls to avoid further increases to business taxes and costs.
In a statement to the press the BPIF said: the highlight in this Budget has to be the news that the main rate of Corporation Tax (which has already been cut from 28% in 2010 to 20% now) will be reduced to 17% by 2020. On business rates it appears that more small firms are to be taken out of the rates regime altogether, while bills for others are set to rise less sharply in future following the decision to move from the Retail Price Index to the Consumer Price Index as the basis for calculating future increases.
With a host of extra employment costs already in the pipeline, including the National Living Wage effective from this April and the new apprenticeship levy coming in next April, it comes as some relief to see a Budget that – by and large – doesn’t add any more of them. However companies making redundancies will face the added cost of national insurance being applied to any termination payments above £30K from April 2018. Disappointingly, there is little detail in the Chancellor’s Statement on the structure of the new apprenticeship levy, other than the announcement that from next year, employers in England will receive a 10% top-up to their monthly levy contributions that they can spend on apprenticeship training through their digital account. With just over a year to go before the levy comes into effect, we eagerly await thefurther details on the operating model promised for this April and the draft funding rates due in June.
Given the high proportion of print delivered by road, the Chancellor’s commitments on infrastructure – including theHS3 link between Leeds and Manchester and other improved transport connections between England’s northern cities – are helpful. So too is the decision to freeze fuel duty again in 2016-17 – the sixth year running. As far as the UK’s digital infrastructure is concerned, today's announcement of a Broadband Investment Fund is also good news.
We are pleased to see that the Carbon Reduction Commitment (CRC) energy efficiency scheme is to be axed. In our submission to the Treasury’s recent Business Energy Efficiency Taxation Review, we criticised this overly complex tax and its failure to deliver significant energy efficiency improvements. While we await details of the changes that Government intends to make to the Climate Change Levy, we note that this is to be done on a revenue-neutral basis. Many BPIF member companies benefit from levy discounts under the BPIF’s Climate Change Agreement (CCA), and so the commitment to keep the existing scheme eligibility criteria in place until at least 2023 is welcome.
BPIF CEO Charles Jarrold said; “With forecasts for growth in the world economy and in world trade being revised down by the Office of Budget Responsibility, the Chancellor has had to produce a Budget that reflects a much weaker future economic outlook. Nevertheless he appears to have listened to business concerns about the mounting cost burdens companies are facing and has avoided measures that would have added further to business taxes and costs. The extra reduction in the headline Corporation Tax rate is good news, as are the planned changes to the scope and indexation of business rates going forward. We are also pleased with today’s announcements on key infrastructure projects and on the simplification of the energy efficiency tax regime.”