5 things to look out for in Budget 2016

The Liverpool City Region business community will be particularly intrigued by the chancellors announcements in Wednesday’s budget.

Posted by Paul Cherpeau

Head of Business Engagement & Communications at Liverpool & Sefton Chambers of Commerce

Tue 15th, Mar

The Liverpool City Region business community will be particularly intrigued by the chancellors announcements in Wednesday’s budget. The shadow of a potential Brexit, a weak pound abroad and the internal divisions within the Conservative Party have put the Chancellor in arguably his weakest position since the start of the Coalition government in 2010. The austerity announced in November’s Autumn Statement was relatively limited, but may well now be felt in full force in this budget.

Skills

This budget, taking place during National Apprenticeship Week, and must provide greater detail of how the government will manage and distribute apprenticeship funding for business.

Further education, not just in Liverpool but across the UK, is under extreme financial pressures impacting on local colleges’ ability to deliver the quality demanded by government. Reforms to the funding of apprenticeships have already begun with the introduction of the apprenticeship levy for larger organisations but there is still a lack of clarity over what role SMEs are expected to take in providing training and apprenticeships - after all SMEs are the majority of our membership and together make up the largest set of employers in Liverpool. There remains much uncertainty concerning how businesses will access apprenticeships beyond August 2017, when the current funding regime will cease and the chancellor should be clear on what happens next.

Business Rates Reform

The door has been opened for business rates reform but for too long has appeared to be unattainable. Devolution has created an opportunity for reform here in Liverpool City Region but the focus to date has been on who gets to keep and spend business rates, rather than reforming the valuation, collection and rate-setting system. The long-awaited reform must be fair and provide safeguards to businesses that rates will not simply be seen as a cash cow to plug future funding gaps by local authorities. The Government should include local businesses through the Chambers of Commerce to shape and design their proposed changes to business rate retention so unintended impacts and consequences don't disturb the fragile economic recovery in Liverpool City Region.

Northern Powerhouse

Northern Powerhouse remains a consistently stated brand without a clear product. Whilst transport infrastructure has been mooted as the biggest tangible opportunity for the Northern Powerhouse little detail has emerged of the real projects required.  Liverpool 2 requires freight links and Lime Street needs regenerating so it can accommodate faster and more frequent services, while an announcement that includes the Liverpool Link in High speed rail plans is also overdue.

Tax simplification

Businesses are increasingly burdened with a complex and punishing tax regime that places increasing burdens on their ability to succeed. Pensions auto-enrolment, the National Living Wage, the apprenticeship levy, quarterly tax reporting and a hike in Insurance Premium Tax have all placed added costs and administrative burdens on companies whilst hikes in dividend tax and restrictions on pensions allowance have inhibited entrepreneurship.

A commitment to deliver no further up-front business taxes for the remainder of this Parliament would be welcomed as there is a growing fear in the Liverpool business community that regulation and administrative changes  are becoming a very real and damaging obstacle to investment and growth and, by proxy, jobs creation in The region.

Enable a supportive culture at HMRC

Taxation is already complex, yet businesses are increasingly frustrated by the dwindling resources and conduct of the taxmen and women at HMRC. The prevalence of a punitive approach to business impedes Liverpool business communities confidence that they are compliant with the plethora of legislation. Rather than a target-driven enforcement culture, investment in providing genuine business support and improving the tax collection processes would be a warmly welcomed improvement to HMRC’s function.

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