The Chancellor’s move to a single-Budget calendar from 2018 has given business hope that this, what you might call the first and last “Spring statement”, would contain few negative surprises so close to the new financial year.
Introducing new rules with the Autumn Budget gives four or five months for businesses and their advisors to react – rather than facing a raft of potential new challenges four weeks ahead of the traditional April 6 deadline, something which we welcome.
Should the Chancellor have any good news to give to business, and without any political emphasis on the options available, what I would like to see are measures which stimulate the oil and gas, renewables, hospitality and tourism sectors.
Making commitments which would deliver the support for accelerated growth which the Highland economy largely wants to see for renewables is one example of a positive curveball Mr Hammond could pitch.
At the same time, I would also be pleased to see tax measures which have been a significant benefit to the tourism sector maintained – such as the relief offered to those businesses bringing empty buildings back to life.
Throughout the last decade, a number of disused properties have for example been transformed into hotels, bringing in much needed accommodation, and jobs, to regions where there is 100% occupancy during the summer months through tourism.
That relief ends on April 5, which is a disappointment given the level of stimulation is has offered the regional economy. The Chancellor could however look to provide new innovative measures which encourage growth in specific regions, or sectors.
At present, investors offering business angel support to start-ups attract tax relief on the funding they provide to that company, through the enterprise investment scheme.
Scotland’s entrepreneurial community would welcome a further relief being offered to the start-up itself. This could assist those people looking to form their own companies, for example following redundancy from the oil and gas sector, and who already face the burden of committing significant resources to get their business off the ground.
A reduced tax burden in the first year(s) of its existence could be the difference between the company succeeding or floundering as it enters the marketplace.
While we acknowledge that every tax rule is open to abuse, necessitating in many cases the complex rules introduced to prevent and discourage such abuse, a simple measure such as
this can encourage new entrants to the market and have a significant positive effect on the economy.
One area where I would prefer not to see any further change is in pensions legislation, where we have seen significant annual updates since 2006. Those edits create uncertainty for those establishing, managing and paying in to schemes, and rather than requiring further intervention I believe that they need to be left alone.
Should the Chancellor feel the need to introduce anything at this stage, I would prefer that those would be consultations on potential future changes, giving everyone greater time to prepare for their formal introduction in the Autumn.
John Todd is a tax partner for Johnston Carmichael