18 things that absolutely must be in Osborne’s Budget

We asked businesses what they wanted to hear in the speech

More investment in regional hubs

Nick Halstead, founder and CEO of DataSift, says: “Osborne wants to put the UK economy on the right footing for the long term, so to do that he needs to ensure that measures aren’t focused on London alone. Up and down the UK start-ups and SMEs are driving growth at a macro and micro level, yet there is a disproportionate number of start-up communities in London. Much of the network that originally supported us was regional and has now been shut down – DataSift was originally funded by Finance South East. It would be great to see more investment in regional hubs.”

Legal framework to help businesses be paid on time

Darren Fell, CEO of Crunch Accounting, says: “We would like to see a strengthening, or perhaps even a complete overhaul, of the Prompt Payment Code, giving more rights to small businesses to penalise big firms that withhold payment. We did some analysis of the invoices raised in our online accounting software recently and about half of them take longer than 30 days to be paid, which is a scandalous amount. Cashflow problems can kill small businesses, and it’s not right that large firms can lean on them for credit when they have the deeper pockets.”

Beatrice Bartlay, managing director and founder of 2B Interface, says: “What Britain needs is a legislative approach to late payment and guess what – one not skewed in favour of the ‘big’ but the ‘small’. I would argue that the Government considers a tiered payment system – 30 days to pay those sub £1.5m businesses, 60 days to pay the mid-sized sector and 90 days to pay those businesses with a turnover of above £7m. It is simple, easy to enforce and ensures that money flows down through the economy to the hundreds of thousands of small businesses.”

Deliver on promises to small businesses

Lee Perkins, managing director of Sage UKI, says: “Our customers would also like to see immediate action tackling the current inefficient and outdated business rate system in the UK.

“Heading into his first budget after the Conservative’s election victory in May, Osborne has a clear foundation of confidence from the small business community with over two thirds stating they are either very or fairly confident he is able to deliver economic growth over the next five years. Osborne has a task ahead of him to deliver tangible results despite a show of confidence as over a third of small businesses saw no real change to their business position over the last five years.”

Tackle low wages

Chas Roy-Chowdhury, head of tax at ACCA, says: “At present if you are 21 and earn the minimum wage for 40 hours per week you will have a gross annual salary of £13,520, meaning after you take off the personal allowance you will have little more than £2,000 of taxable income. However, if you raise this figure to the living wage outside of London an employee would earn £16,325 or £19,032 inside of London. Meaning there would be more than twice as much taxable income.

“A small tax break would incentivise the employer, give the employee more money in their pocket each month and also increase the tax take for the government. Higher wages can also mean a more motivated and therefore more productive workforce; this can lead to higher profits for the employer in the long run.

“The government has talked about tackling the causes of low pay and this would be a perfect example of how to begin to solve the problem.”

Tax cuts to boost spending

Gareth Poppleton, managing director at Retail Merchant Services, says: “Above all, this year’s budget must seek to – and be able to provide tangible ways to deliver upon - encouraging business investment if the UK is to achieve its growth goals by 2020 and improve productivity.  This will mean a focus on reviving consumer spending through readdressing tax allowances – with an increased higher rate threshold and tax cuts for lower paid workers to encourage them to work and to boost their disposable income.  Short term cuts should be implemented now if the Government wants to stimulate long term investment and growth for the future.”

Rail improvements

Jason Downes, managing director of Powwownow, says: “In Osborne’s last Budget he confirmed new investment in transport across the country including connecting up the South West with over £7 billion of transport investment, including a new rail franchise which will bring new intercity express trains and greatly improved rail services. I think the rail network should definitely be a big area of focus in this year’s Budget. It seems staggering the amount of money invested in rail transport and yet the time it takes for changes to actually be implemented doesn’t match up at all.  

“The disruption and inefficiency the rail network causes businesses across the UK is just ridiculous and at this time of year travelling conditions only get worse with the heat and lack of air conditioning. An agreement needs to be made to stop the regular striking action too”. 

Reduce red tape for small and micro businesses

Ed Molyneux, CEO and co-founder of FreeAgent, says: “I would like to see radical simplification of the UK tax system that actually helps micro-businesses and freelancers, rather than simply paying lip service to them.

“Ideally this would include scrapping IR35 completely and replacing it with clear, simple guidelines that are less subjective and easier for contractors to deal with. And, as many micro-businesses are frustrated with the sticky issue of VAT MOSS, I’d also like to see a threshold introduced that exempts these small entities from having to charge local VAT to consumers in the EU.”

Improve investment opportunities

Nick Gold, managing director of Speakers Corner, says:  “We hope the Chancellor might see value in… continuing to encourage ‘entrepreneurs’ and investors to put their money into business to enable growth and innovation.  This encouragement is currently delivered through schemes such as EIS or SEIS and I would love for this to be continued and developed further; made easier and more accessible to people.

“It would be tempting at this point to highlight if the government now feel that private individuals can personally manage our pensions better, why is there still an onus on investors to prove (or validate) they are of high net worth or financially sophisticated– surely the new pension regulations imply everyone has the potential to be a sophisticated investor.”

Reduction in VAT for small businesses

Sarah Watkinson-Yull, CEO of Yull shoes, says: “If the government want to function as ‘heroes of the economy’ small businesses need to see immediate action and decreasing VAT should be at the top of the checklist. It’s much harder for small firms to absorb the 20% VAT, instead we have to pass the cost on to our customers, reduce stock levels and dig deep to find other ways to save cost.

“A decrease in VAT means I, along with other small businesses, will be able to look into employment -something I’m eager to do to drive my business forward, but something which has been made almost impossible due to the latest increase in VAT, which completely undermined the government’s private sector led recovery.”

Improve finance options for small businesses

Tracy Ewen, managing director of IGF Invoice Finance, says: “The government needs to provide support and easy access to finance that is geared towards the smaller SMEs, not just the financially astute. The ruling that banks must now direct firms towards alternative finance providers is a step in the right direction, but the approval rate of these referrals be monitored to ensure the scheme is a success.”

Help with exporting

Jim Wilson, managing director of Born Gifted, says: “Hope for help with export/expanding the business worldwide.  This is a minefield for small businesses with complicated tax implications and little information and support available. It would be great to see George Osborne address this area.”

Apprenticeship support

Ben Dyer,founder of National Enterprise Challenge, says:“I would like to see continued support for Apprenticeships. Young talent is the future of the workforce and the country so a strong support system is crucial for the country’s financial success.”

Help businesses engage with their workforce

Neil Pickering, director of Kronos, says: “George Osborne’s upcoming Budget must indicate towards ways in which the government can help businesses better engage and manage their workforce.  An organisation’s workforce is their greatest asset, and now more than ever, companies need to have the room to change practises and invest in methods that will engage their employees through greater flexibility and job variety.”

Sort out Right to Buy

Peter Burgess, director of Retail Human Resources, says: “Changes must be made to the Right to Buy scheme. Not only is it morally wrong but is economically illiterate. Basically the Government has given a pot of money, estimated to be worth approximately £5bn, to a group of people they hoped would vote for them. I doubt if they even did and the explanation given as to how this is to be funded is even more bizarre. The government says it will fund the rebuilding of homes sold at a discount from housing associations through the sale of council houses in expensive areas.  If this is the right policy - and I am not sure it is - then the £5bn they think it will raise would be better spent on the building of new homes elsewhere, or indeed on any of the other far more worthy causes that need government money. Otherwise this could provide serious damage to an already broken housing supply.”

Tackle tax avoidance

Vince McLoughlin, partner at Russell New, says: “Inevitably Osborne will outline more plans to tackle tax avoidance and aggressive tax planning by the rich. He will face little opposition from the business community — specifically to his plan to raise over £5bn from targeting evasion and “aggressive” avoidance. But this doesn’t help the majority of businesses and we must also see confirmation that the annual investment allowance (AIA) for capital allowances will be kept at £500,000.If he does confirm that the rate will be kept at this higher level this would kick-start the kind of investment needed to enable businesses to thrive.”

Child tax benefit improvement

Michelle Wright, CEO and founder of Cause4, says: “The removal of child tax benefits will affect working women and seems set to affect a system that seems to be working. As a CEO about to have my first child, I am concerned about the impact of this for small business owners and particularly for individual working mothers trying to do the right thing.”

Business rates revamp

James Layfield, founder and CEO of Central Working, says: “Business rates are still in desperate need of reform if more entrepreneurs and start-ups are going to truly thrive, rather than simply survive. Small businesses fuel the UK economy but, while promising rate reform was announced in the Spring Budget, current legislation just doesn’t promote an ideal environment for SMEs. If we’re to see truly meaningful growth in this sector, the Chancellor should use the upcoming Budget as an opportunity to promise further small business rate relief.”

 

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Readers' comments (1)

  • Beatrice Bartlay - where do you get the idea that businesses turning over above £1.5M can afford to wait 60-90 days to get paid, that's exactly the attitude we can do without!! Just because businesses have a large turnover, doesn't mean they are sitting on pots of cash, in our industry (specialist sub-contractors in the construction industry) it's almost certain to be the opposite. I suggest you keep those opinions to yourself because they don't apply to most of us SME's trying to survive after a brutal recession!!!

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