“The Chancellor’s commitment to supporting the economy through the crisis has been welcome, and today’s announcement of extensions to this support is good news for the business community and for job creation. We’re pleased to see extensions to the furlough scheme, the deferral period for VAT and business rates. Expanding access to grants for the self-employed is also welcome – but there is still no sign of a support scheme for owner-operators of small limited companies, who have so far received no help at all, despite their vital role in driving the recovery.
“Where the Budget missed the mark was on the plan for recovery. There are bright spots – the new super deduction tax incentive will certainly address a long-term failing of UK policy and boost productivity and job creation. But what we needed from this Budget was a clearer strategy for tackling unemployment and resourcing growth. There was little on the skills transition this requires, including reforming the failed Apprenticeship Levy so that it supports rather than hinders training. A flexible skills levy would deliver better apprenticeships for young people and allow older workers to do the qualifications they need, rather than the ones Government is willing to fund. Likewise, at a time when business tax is rising overall, cutting the tax on jobs – employers’ national insurance – would have helped to tackle unemployment as it heads over 2 million during this year.
“The rise in corporation tax will not be welcomed by many businesses, but repayment of the support received in the last year is necessary over time – and doing it later in the Parliament via a tax on profits, rather than on day-to-day operations is the right lever. The small profit rate and greater carry-back on losses will help soften the blow, but the OBR shows that this will increase tax on profits to its highest since the 80s – it can’t become a long-term trend.”
