SMEs and Autumn Statement: UK200Group Verdict Friday 25 November 2016 PDF Print Philip Hammond in his first Autumn Statement as Chancellor certainly gave a ‘business as usual’ offering On Wednesday, Chancellor of the Exchequer Philip Hammond announced his Autumn Statement to Parliament, the wider implications of which are sure to affect SMEs across the UK. But will those changes be beneficial or detrimental to conditions for the UK’s owner-managed businesses? The UK200Group is the UK’s leading membership association of chartered accountancy and law firms, whose members act as trusted business advisers to over 150,000 SMEs. A number of the UK200Group’s members have given their initial views of the Autumn Statement’s impact on the SME community, spanning industries as varied as agriculture, fintech, charities and sole traders. David Martin, Corporate Finance Partner at UK200Group member firm Knill James, based in Lewes, Sussex, said, "The announcement in today’s Autumn Statement that a further £400 million will be invested by the British Business Bank to help unlock investment in developing innovative UK firms is welcome news indeed. "This further encouragement to the UK’s cutting edge technology sector, when combined with our attractive R&D tax relief regime, will help ensure that we remain centre stage in the world in the uncertain post-Brexit era. "This additional fund is specifically aimed at those companies in the scale-up phase where traditional sources of finance are often difficult to arrange. We all hope that beyond the attention-grabbing headline, the deployment is full, effective and rapid in this fast-changing world in which we all compete." Mike Chapman, Senior Manager, Corporate Tax at UK200Group member Knill James, said, “Following the shocks of the Brexit referendum, a Donald Trump presidency and Leicester City winning the Premier League maybe we were due for something a little less exciting. Philip Hammond in his first Autumn Statement as Chancellor certainly gave a ‘business as usual’ offering, presumably hoping that the relatively encouraging UK post-Brexit economic performance could be maintained despite the possibility of turbulent times ahead. “With a forecast for reduced growth in 2017, it was important that the Chancellor presented the UK as the natural home for business and he stressed the commitment of several high-profile multinationals to continue to invest in the UK economy. The drop in the headline rate of corporation tax to 17% from 1 April 2017, the lowest rate in the G20, confirmed the Chancellor’s priority to ‘ensure that Britain remains the number one destination for business’, while acknowledging the importance of certainty and stability to business as a whole. “On a less upbeat note, Mr Hammond did not shy away from the issue of the productivity gap between the UK and its immediate competitors and focussed on the need to bridge this divide through research and innovation in providing £2 billion per year by 2020 for R&D funding." Liz Ward, Principal of Leeds-based UK200Group member and specialist IP law firm Virtuoso Legal said, “The statement is of great interest to our technology clients as the government seems to understand that they have to actively assist in the generation of IP in order to grow the economy. So far, spending has been promised for universities and also to help technology companies to scale and grow. “One of the biggest problems is that, whilst the UK generates lots of great start up and SME technology businesses, once they grow they tend to be snapped up by overseas investors. We need to support these companies and help the UK retain talent and ownership of businesses.” Francis Whitbread, Tax Partner at Chelmsford-based UK200Group member Edmund Carr said, “The announcement of a crackdown on the promoters of tax avoidance schemes is welcomed by those of us who have been trying for years to make sure our clients do NOT get involved with arrangements that are artificial and have no commercial reality. “Going into a tax avoidance scheme can result in an entrepreneur losing focus on his business as a result of the ‘tax tail wagging the dog’. However, it is disappointing that the Chancellor did not make it clear that the dictum laid down in the Duke of Westminster case in the 1930s, that ‘it is the right of every man to organise his affairs such that he may legitimately pay less tax than might otherwise be the case’ still applies. “We tax advisers who have taken that to mean tax planning around timing of expenditure, timing of disposal of assets etc. would welcome government clarification that this is not frowned upon, and distinguished from the much more aggressive schemes. Our ability to continue to provide this kind of tax planning advice to our SME clients is essential to their continued financial success.” Jonathan Russell, Managing Partner at Oxfordshire-based UK200Group member ReesRussell said, “Rural SMEs will benefit with the permanent relief for business rates in rural areas giving tax breaks worth up to £2,900 per year. “There will be possible help for growth firms with £400 million being pledged to venture capitalist funds for small businesses. However, what the government views as a ‘small business’ is yet to be seen.” Andrew Jackson, Chair of the UK200Group’s Tax Panel and Head of Tax at UK200Group member Fiander Tovell , based in Southampton, said, “On the plus side, Philip Hammond acknowledges that certainty is welcome, and is largely giving certainty by not tinkering too much with Budget 2016 announcements. “Having an Autumn Budget in future will also help, as we may have laws coming into effect after they’re made rather than before, as is all too often the case at the moment. “There were some encouraging suggestions that the Office for Tax Simplification recommendations over aligning tax and National Insurance will go ahead. However, it is discouraging to hear suggestions that employment / self-employment is to be targeted. This is a grey area and there is scope for people on the borderline to be hit hard. “Similarly, employee expenses and benefits are to be scrutinised. This may mean more detailed rules that employers have to be aware of, and may mean that people getting the same reward package get taxed differently, which seems unfair. The problem is that tax and National Insurance aren’t aligned: if the Chancellor would do that – as suggested by the Office of Tax Simplification – then these problems would go away and employers and employees could just get on with things without having to look over their shoulders all the time.” Will Abbott, Partner at Cheltenham-based UK200Group member Randall & Payne, said, “From our strategic work with SMEs, we know there is a productivity problem in the UK and the Chancellor was at pains to repeat oft quoted information to emphasis this – we are even less productive than the Italians! It will be interesting to hear more about the £23 billion productivity fund, support to turn R&D into commercial products and the overall aim to lift employee skills in the UK to drive increased wages and living standards.” John Painter, Managing Partner at Worcestershire-based UK200Group member firm CB Chartered Accountants, said, “My initial thoughts are that the property and construction industries should, as a whole, be delighted with the news that there is an extra £1.4bn towards the cost of building 40,000 new affordable homes, and a further £2.3bn on infrastructure to help move towards the target of 100,000 new homes, especially as there were only 32,000 new homes built in 2015/16. “If we get the infrastructure and construction moving then the economy should always benefit. “The restrictions on tenants paying agents fees will probably result in higher rents being charged, which would be counterproductive to what the Government is trying to do.” James Abbott, Founder of Abbott Moore and President of the UK200Group, said, “Although there weren’t a huge number of changes to tax, I was pleased to see the government’s commitment to lowering Corporation Tax to 17%. This will directly affect a lot of my business clients, who were hit earlier this year by a rise in personal tax on dividends. “The government’s stance on research and development is also important, and the figures that Philip Hammond gave for our productivity show that we are lagging behind our main competitors. Competitiveness is especially key in the wake of the EU referendum. “Employees, the self-employed and limited company owners all face different tax and national insurance burdens and this is clearly still very much on the government’s agenda. I genuinely expect some significant changes here, but it is impossible to say with certainty what those changes will be.” ENDS Media information provided by Famous Publicity. For further information, please contact George Murdoch on 0333 344 2341 or firstname.lastname@example.org, Adam Betteridge on 0333 344 2341 or email@example.com or Tina Fotherby on 07703 409 622 or firstname.lastname@example.org. About the UK200Group: The UK200Group was formed in 1986, and is the UK’s leading association of independent chartered accountancy and law firms, with connections around the world. The association brings together around 150 member offices in the UK with more than 500 partners who serve roughly 150,000 business clients. Its international links in nearly 70 countries give its members access to expertise across the globe. The UK200Group aims to present a wide variety of views from its member firms, but itself remains impartial and unbiased in political matters. This press release was distributed by ResponseSource Press Release Wire on behalf of The UK200Group in the following categories: Men's Interest, Women's Interest & Beauty, Business & Finance, Public Sector, Third Sector & Legal, Manufacturing, Engineering & Energy, Computing & Telecoms, Construction & Property, for more information visit http://pressreleasewire.responsesource.com/about.