Will the Chancellor’s Budget deliver for businesses?

“Today’s Budget focused on a promise to grow the UK economy.  The Chancellor’s speech was full of aspiration and affirmation (and four E’s), but it remains to be seen whether sustainable economic growth can be spoken into existence.  A healthy and thriving economy needs investment from across the public and private sector, from entrepreneurs and SME owners, to Private Equity, Financial Institutions and other institutional investors nationally and internationally.  Historically the UK offered a high degree of confidence around long-term investment – I hope there is sufficient substance in this Budget to continue rebuilding this confidence.

“The announcement of a 100% deduction for qualifying capital expenditure is certainly better than a simple cessation of the 130% super deduction regime without replacement.  And from one perspective, given the 25% corporation tax rate from 1 April, from the Government’s perspective the tax relief offered by the replacement regime is close to equivalent.  I don’t think that is how most businesses are likely to see things in the round, however.  Hopefully this is not a sign of a wider dissonance between the Government’s aspiration and businesses’ motivation.

“Few expected the Chancellor to row back from the planned hike in corporation tax from 19% to 25% from April. However, business will be disappointed by the lack of a clear roadmap to bring down corporation tax in the coming years. Businesses think and plan long-term, and they need the clarity to make investment decisions.  The Chancellor did announce the intention to maintain the 100% deduction for qualifying expenditure indefinitely when affordable – it would have been nice if a similar indication of the Chancellor’s thinking could have been given on corporation tax.

“Much like the ambition to being a fully ‘quantum economy’ by 2033, we won’t know the state of the UK economy following today’s Budget until we can measure it.”