Business reacts to Hammond’s ‘budget for grafters’

As Chancellor Phillip Hammond delivered his last budget before Brexit Business Matters spoke to some of the organisations that support UK SMEs about whether they felt the announcements went far enough.

Commenting on the 2018 Budget, Christoph Rieche, CEO and Co-Founder of iwoca, said: “Cutting business rates will come as welcoming news to thousands of independent retailers like Champ’s Barbers who we helped expand into a second premises earlier this year. At a time when jobs and economic growth are more dependent on the success of this sector than ever before, the Government should be clearing the way for British businesses to thrive. It’s taken a step in that direction today.”

Chris Robertson, CEO at Creditsafe said: “It’s clear from this year’s budget the Chancellor had the interests of SMEs in mind, with notable measures including the increase in the level of business rates relief on UK high streets, while also revealing that apprenticeship fees will be halved to 5% for UK small businesses.

“Increasing Export Finance’s direct lending facility by up to £2bn to help more businesses export aboard is also welcome, although the fallout from a disruptive no-deal Brexit could outweigh any benefits SMEs might see.”

Commenting on the Chancellor’s digital sales tax, Stella Amiss, head of tax policy at PwC, said: “The Chancellor’s strong words of recent months were no bluff. At home, the confirmation of a new digital services tax was trailed as a step towards levelling the playing field between online retailers and the high street.

But it is much more than that. Working out who is taxed and who isn’t in the digital economy is no mean feat when all businesses operate in an increasing technological world.

It’s no surprise then that the Chancellor has approached this with caution – a narrowly targeted regime, a 2% rate, and an effective implementation date pushed back to 2020.

This new tax is well and truly aimed at the tech giants and not the online retailers so will do little to address the woes of bricks and mortar retailers and could well be perceived across the pond as an anti-American measure that could come back to bite us as the UK looks to move to trade talks after the Brexit deadline.”

Richard Stables, CEO of Kelkoo, said: “The Government’s crackdown on tax-dodging digital companies is long overdue. Google and Amazon have been avoiding tax payments which has given them an unfair edge over the competition. Online retailers’ financial advantage over bricks and mortar competitors is not the reason for the struggle and failure of traditional high street names – that is down to the inability to meet consumer demand for a coherent online strategy and user experience.”

“Retailers who have failed to compete in recent years should be focussing on the mistakes made in terms of marketing and tech upgrades rather than desperately searching for a scapegoat to cover their backs and avoid the ire of shareholders.”

Richard Godmon, tax partner at accountancy firm, Menzies LLP, said: “We weren’t expecting big decisions about funding for business in this Budget, due to the high level of Brexit uncertainty. However, there is some positive news for small and growing businesses, with the prospect of more to come, if the right Brexit deal is struck.”

Ben Jackson, CEO of early payment provider, Oxygen Finance, said: “Today was a missed opportunity for the Chancellor to deliver on his Spring Statement pledge to stamp out late payment. All we’ve had since then is further consultation on the issue, but no decisive action.

“While further legislation isn’t the answer to this deep-rooted problem, there is a case for strengthening existing measures. In practice, this would mean immediate financial consequences for businesses who pay late. The existing rules see late payers merely reporting on the extent to which they pay late, with the onus on suppliers – who will be reluctant to bite the hand that feeds them – to trigger any financial penalty.