Businesses across Wales have responded to the Chancellor’s Autumn Budget, held on October 27 2021.
Responding specifically to the £130 million fund for small businesses, Paul Slevin, President of Chambers Wales, said: “SMEs are the lifeblood of Welsh business and play a vital role in the growth of our economy. This multi-million-pound commitment to specifically support small and medium sized businesses in Wales is a welcome investment to enable future growth, particularly after the challenges of operating throughout the pandemic.
“We understand that the fund will be delivered through the British Business Bank and it is essential that we now receive clarity on eligibility criteria, funding channels and how to access support to ensure that as many SMEs as possible can benefit from this funding opportunity.
“We look forward to speaking with industry leaders over the coming weeks to better understand the implications of the budget for their business and how we can assist them to unlock their growth potential.”
Quantum Advisory noted that a Budget intended to help drive economic growth as the country recovers from Coronavirus also brought welcome changes for the pensions world including pension tax top-ups for low earners and changes to the charge cap on defined contribution schemes.
Speaking about the tax top-ups, Simon Hubbard, Senior Consultant and Actuary at Quantum Advisory, said: “Industry commentators have been asking the Government for years now to resolve the unfair tax treatment of pension contributions by low-paid workers. This change will be welcomed by many, though it’s disappointing that it will not apply until April 2024. However, the bigger question of increasing the auto enrolment minimum contribution amounts has been avoided for a further year.”
Head of ACCA Wales, Lloyd Powell, looked at the impact of the Budget on SMEs, tax, skills and the climate crisis.
He said: “As we build back the Welsh economy after the pandemic, we welcome the additional funding for Wales announced today to support business, skills development, people and communities, including the funding for the British Business Bank to establish a £130 million fund in Wales, helping Welsh businesses get the funding they need. Confirmation that total funding will, at a minimum, match the size of EU Funds in Wales each year through the Shared Prosperity Fund is also welcomed. A joined-up approach between the UK and Welsh governments is needed to ensure effective and efficient delivery of programmes to support Wales and the Welsh economy, with a greater focus needed to support SMEs’ access to green investments and business planning.”
“We are concerned about pressures building on small businesses, which are now faced with repaying tax on the £20 billion plus worth of grants and support they received to keep them afloat during the early stages of the pandemic until April 2021. This huge tax demand will hit companies which are just regaining profitability and adds to squeezes due to increased tax on dividends and employers’ National Insurance for the Health and Social Care Levy.”
“We are disappointed that today’s budget did not take the opportunity to support the tourism and entertainment sectors further by keeping their VAT rate at 12.5% beyond next April and for the remainder of this parliament. A lower rate of VAT would help ensure people keep coming through the doors regardless of locality or size of the business.
“Historically, the UK has had one of the highest VAT rates for these sectors across Europe and we have shared our fear with the Treasury that returning to a rate of 20% within months has the potential to inflict huge damage on an already struggling sector and make many businesses unsustainable.
“While the Chancellor has announced cuts in business rates for the retail, hospitality and leisure sectors in England, we await the Welsh Government’s draft budget later this year for details regarding further business rates support in Wales.”
“We welcome the Chancellor’s statements about government and business investment in green technology and job creation, but we haven’t heard any details about enabling the broader skills needed to make this a reality. We need to invest in skills, reskilling and continued learning to ensure the government achieves maximum impact and value from green investment. Finance teams can help their organisations to plan, measure and report on their efforts to reach net-zero.”
“We would like to hear more from the Chancellor about greater investment in skills development. It’s more important than ever that the UK has a strong pipeline of professional and ethical business advisors, as we seek to boost productivity and take advantage of new opportunities.”