Lancashire business leaders today welcomed a number of measures announced in the Summer Budget.
George Osborne announced pledges including a cut to corporation tax to 19 per cent by 2017 and 18 per cent by 2020 and setting the Annual Investment Allowance at £200,000.
A rise of the living wage to £9 per hour by 2020 will be supplemented by an increase in the National Insurance threshold for companies to £3,000, making wage increases affordable for SMEs.
Mr Osborne also announced that he was pressing ahead with plans to create a Northern Powerhouse.
Babs Murphy (below) of the North and Western Lancashire Chamber of Commerce said: “The Government has clearly signalled that Britain is open for business and we welcome the announced cuts to corporation tax, raising of AIA and an increase to the National Insurance contributions threshold.
“We all recognise that increased earnings and living standards will help feed the economy and small businesses in Lancashire will be pleased they have been given the National Insurance relief to help them afford increasing wages in the coming years.
This is a double edged Budget for business. Firms will welcome measures to balance the books and boost investment, but they will be concerned by legislating for wage increases they may not be able to deliverGill Molloy
“Cutting corporation tax will enable companies to enjoy a greater share of their profits. The Chancellor has also signalled his intention to push forward with the Northern Powerhouse and, although there was no mention of negotiations with Lancashire local authorities, we can take comfort from the fact these conversations are taking place.
Gill Molloy group tax director at Preston-based Champion Accountants, said: “This is a double edged Budget for business. Firms will welcome measures to balance the books and boost investment, but they will be concerned by legislating for wage increases they may not be able to deliver.
“Other standout measures include making the Annual Investment Allowance permanent at £200,000, which the CBI called for, as well much-needed investment in our roads network.
“The further reduction in corporation tax is a welcome surprise but tax reductions for employers don’t appear to match the businesses most affected by a rise to £7.20 in the Minimum Wage next April – a 7 per cent increase.
“The CBI supports a higher skilled, higher wage economy, but legislating for a living wage does not reflect businesses’ ability to pay.”
Emma Suchland, Tax Partner at BDO LLP in the North West, said: “On the one hand the surprising reduction in the headline rate of corporation tax to 19 per cent next year and 18 per cent by 2020 was a positive move for businesses, as was the increase of the NIC employment allowance from £2,000 to £3,000. However, this will largely be offset by the introduction of the national living wage which may well have a significant impact on small businesses.”