BSRIA Chief Executive, Julia Evans, has given her reaction to the Chancellor’s 2016 Budget.
“Industry wanted a steady and balanced Budget, and that’s what we got. The Chancellor has avoided higher business taxes and costs – and indeed lowered them in a number of areas. He has taken action to lessen the burden of business rates, and honed incentives for investment.”
The state of economy / Business Tax Roadmap, Corporation Tax and Capital Gains Tax:
A growth rate of 2 per cent is now forecast for 2016, revised down from 2.4 per cent in November’s Autumn Statement. And forecast growth of 2.2 per cent and 2.1 per cent in 2017 and 2018, has been revised down from 2.4 per cent and 2.5 per cent.
“This will have an impact on industry investment in development and, most importantly, investor confidence.”
The headline rate of corporation tax – currently at 20 per cent – is to fall to 17 per cent by 2020.
“This is encouraging news for BSRIA SME members and the wider industry since it will allow such companies to bid more easily for more contacts and generally compete with more corporate businesses. In essence, this allows them to make investments with certainty.”
Commercial stamp duty 0 per cent on purchases up to £150,000, 2 per cent on next £100,000 and 5 per cent top rate above £250,000. New 2 per cent rate for high-value leases with net present value above £5m. (Effective from midnight.)
“Again, this will have a broadly positive impact on commercial development which is good news for the construction industry – looking ahead to 2016 and beyond.
We acknowledge that these changes are likely to be welcomed by SMEs and property investors, however the 5 per cent band could affect the market for larger commercial properties.
The Business Tax Roadmap will help provide a greater degree of certainty as businesses look to plan for the future. Ultimately, the acid test for the roadmap will be whether it makes it easier for businesses to navigate the UK’s complex tax system.
Cuts to corporation tax and capital gains tax show that the industry – and the UK at large – is ‘very much open for business’. Clearly, a few economic rabbits have been pulled out of hats to ensure some favourable financial impacts for the construction industry.”
“All in all, the rates reforms are a significant step in the right direction. Businesses will cheer measures to cut the hindrance of business rates, which hundreds of thousands of firms have to pay before they make any profit.”
“It is a shame that the Budget didn’t ‘go further’ to include simpler energy efficiency schemes to be counted as infrastructure – so that they are funded out of taxation rather than fuel bills that many households are struggling to afford – which is regressive. Insulation pays for itself so many times over – especially when you include the creation of jobs.”
Tax changes for the oil and gas industry:
“The changes to tax for the UK offshore oil and gas industry won’t have an immediate impact but will go some way to secure investor confidence in the sector. The move reflects the severe challenges facing the industry due to current oil prices, and provides support for continued investment at a critical time.”
Increase in the climate change levy:
“The government must be watchful in making sure that carbon taxes on businesses do not make them internationally uncompetitive.
But what of renewable energy? Such green credentials must play a part in achieving carbon emissions targets. Delivering the change that is required to meet such targets will require long term investment from industry; this will only happen if it has the confidence to do so.”