Mixed bag for British business
Has the Chancellor done enough to turn the green shoots of recovery into sustainable growth for the economy?
After one of the most austere budgets in decades, many in the small business world are still working through the implications for their operations.
If you’re one of the lucky few firms with access to credit or have a healthy cash flow, then increased capital allowances for investing over £50,000 was one way the Chancellor tried to encourage continued investment during the recession. But of course, directors need to be able to get their hands on those funds to invest in the first place, so this measure might not be of benefit to everyone.
Probably not blind to this, Mr Darling also extended the carry back rules to help cash flow for many by allowing losses to be offset against profits over the last three years. This could give some small businesses the vital breathing space needed to see ‘green shoots’ turn into a budding economy of modest growth.
And while the Government announced plans to help the long term unemployed retrain, there was little to be noted about helping businesses hold onto staff BEFORE they become jobless. By introducing measures to help smaller businesses cope with costs such as part-time working and maternity cover, the Government could have prevented addition to the dole queues in the first place. But instead an increase in statutory redundancy pay will push up costs for many business owners going through that difficult process.
On top of this, increased fuel costs and a hike in the employer’s National Insurance contribution scheduled for 2011 all add to the pressures of trying to run a business in what Mr Darling himself referred to as “the most serious global turmoil in 60 years”.
What’s more, if you’ve built a business that looks set to survive the downturn and can still take home £150,000, there’s a new 50% tax rate for you to look forward to, too!
