Business leaders and experts in the South West have called on Chancellor George Osborne to assist businesses at a grass roots level when he delivers his Budget today (21 March 2012). Measures to encourage growth and simplify tax will also be welcomed.
Insider has canvassed opinion from across the region and found that measures to improve infrastructure, encourage investment in business and stimulate consumer spending are vital to the growth of the South West.
Julian Cockwell, tax partner at KPMG Bristol, said: "In the South West the government needs to assist businesses at a grass roots level. An increase in capital allowances would give businesses the incentive they need to invest and help them to prepare for future growth opportunities.
"Growth remains a huge priority as we try to recover from the recent economic upheavals. The news that this year’s financial borrowing is on track to leave the Chancellor with a surplus of up to £10bn is positive. Even if the Chancellor takes a prudent approach, this surplus may provide some flexibility for measures to stimulate growth."
Cockwell also said that Osborne should reduce employers' National Insurance contributions and introduce tax incentives for investment. Tessa Coombes, marketing, membership and policy director at Business West, added that she wants to see a Budget that "empowers businesses to create jobs".
She said: "The Chancellor must step beyond the rhetoric and deliver improved incentives for businesses to hire young people, give greater confidence to business by scrapping the proposed increase in business rates and provide greater support to UK exporters.
"In addition, our members and other local businesses want to see an end to wasteful regulation that hinders business growth, changes to the planning system that enable economic growth and an improved flow of finance to local businesses."
Ian Stone, partner and head of tax at Deloitte in the South West, said cutting tax could stimulate the economy and wants to see the end of the 50p income tax rate.
"We have no idea, however, how much tax has vanished through emigration (and lack of immigration), acceleration and deferral. We would like to see the Chancellor abolish this rate, or as a minimum set a clear timetable for its withdrawal."
The Chancellor is also being urged to support R&D businesses in the region by not watering down the Patent Box. Under the current framework, profits from inventions protected by a UK patent will be taxable at a 10 per cent rate of corporation tax.
The Patent Box plans are set to be phased in and will only apply to 60 per cent of the profits from the planned date of introduction in April 2013, rising to 100 per cent by 2017.
John Dean, managing partner of the Bristol office of Withers & Rogers, said: "R&D led businesses have the potential to drive recovery and create jobs and doing away with the planned profit taper could allow them to feel the benefit of the Patent Box sooner rather than later. Such a move would get a reaction and could encourage businesses to locate more R&D in the UK."
Rob Brown, tax director at accountancy firm BDO's Bristol office said he would be "surprised" if tax simplification measures were not featured and said that the Chancellor needs to "introduce further measures to demonstrate his determination for the UK to be regarded as a business friendly location".
"Indeed, it will be very disappointing if he does not achieve this", Brown added.
PUBLICATION: South West Insider - 21st March 2012