Business owners in the North East are hoping to receive a boost in today’s budget with many expecting announcements to make it easier to invest and grow organisations.
While the Budget 2014 is expected to be low key ahead of the Chancellor’s pre-election Budget in 2015, tax experts in the North East have said there are still opportunities for George Osborne to give a sweetener to businesses.
Among the predictions today’s Budget could bring are an introduction in a tax allowance for capital costs to provide support for investment in infrastructure.
Stuart Cottee, head of tax at Deloitte in the North East said: “The UK has a pressing need to invest in infrastructure – but some infrastructure costs are not eligible for any form of tax relief.
“Introducing an allowance for capital costs would be a welcome reform and would help support vital capital investment.”
Chris Hodgson, a tax adviser at Tait Walker in Newcastle, added extending the Annual Investment Allowance at £250,000 to 2015 would provide businesses with confidence that they had the encouragement to grow.
He said: “There are two key issues I hope to see addressed, firstly an extension of the Annual Investment Allowance at £250,000 for a further year to the end of 2015. This will present a strong sign to businesses that the Government is backing investments to encourage growth.”
Alastair Wilson, also at Tait Walker said a tax relief aimed at the manufacturing sector would be a big boost. He said: “I would like to see a number of commitments come out of the Chancellor’s Budget. Firstly, commitment to encourage investment in the UK’s SME manufacturing sector by extending the £250,000 Annual Investment Allowance beyond 31 December 2014.
“This would ensure SMEs have clarity over investment decisions and can make informed choices when acquiring new plant and machinery, based on the knowledge that they will get accelerated tax relief in return for that investment. A commitment to encourage investment in new manufacturing facilities by providing a targeted version of Industrial Buildings Allowances, which provides 100% relief for the cost of a new factory.
“Limiting the relief to premises qualifying as factories would enable the relief to be targeted at the sector which is expected to drive the growth of the UK economy. It will also help encourage the trend in ‘re-shoring’ manufacturing, which has recently been on the increase.”
James Ramsbotham, North East Chamber of Commerce (NECC) chief executive said the Budget needs to concentrate on investment in infrastructure. He said: “The Chancellor must be bold in this Budget in order to unlock the potential of the North East and harness rising optimism across our business community while ensuring spending and cuts are distributed evenly throughout the country.
“North East business is driving forward economic growth. With strong performing manufacturing and energy sectors, connectivity is a priority for our region. NECC’s Budget Submission urges a robust approach to infrastructure investment, with priorities such as upgrading the A1 north of Newcastle, securing a pledge to extend HS2 to the North East, addressing the disproportionate impact of Air Passenger Duty on our airports and greater support for the Dogger Bank offshore wind farm.”