Experts from a West Midlands accountancy firm have given their reaction to today’s Spring Budget (March 6), which included new funding announcements for the region.
Prime Accountants hosted a Coventry and Warwickshire Chamber of Commerce round table event at its Coventry offices to provide business leaders with the opportunity to reflect on the impact of announcements to the West Midlands.
In what is expected to be the last budget before a general election, delegates discussed the key takeaways from Chancellor Jeremy Hunt’s statement, including levelling-up funding for the region, a further reduction in National Insurance and abolishing higher-rate Capital Gains Tax.
The Chancellor announced the much-trailed National Insurance cut of 2p from April 6, from 10 per cent to 8 per cent, said to be worth £450 for the average employee and £350 for the self-employed.
The higher-rate Capital Gains Tax of 28 per cent on property sales will be abolished, reducing the tax to 24 per cent to increase revenue.
Levelling-up funding worth £100m will be allocated to areas across the UK, including £5m to Coventry, to support nationally significant cultural and creative projects, helping to extend the legacy of the City of Culture from 2021.
A devolution deal for Warwickshire was also trailed, giving local councils more power to make decisions locally; this includes up to £20m of funding to spend in Bedworth.
To support SMEs, plans to increase the VAT registration threshold from £85,000 to £90,000 were announced to support business growth.
Reflecting on the announcement following the round table event, Steve Harcourt, director at Prime and the Chamber president, said: “As always, the devil will be in the detail. In Coventry, we think this money will support capital investment in culture and extending the legacy of the City of Culture.
“The devolution deal for Warwickshire is interesting, but again it sounds like it’s more for cultural spending, training and skills, and the benefit of residents, rather than for businesses.
“We also saw an announcement of a £20m fund for Bedworth, which is really positive and will help local authorities provide more support when funding services in the area, and regeneration.
“The devolution deal for Warwickshire will give the county more power and control over areas such as adult education.
“It is a Level 2 devolution agreement, so it is a lower level than the West Midlands Combined Authority and more detail will be needed for us to know the full benefits.”
Elsewhere in Mr Hunt’s statement, he announced fuel duty will be frozen for another 12 months, saving the average car driver £50 per year, while alcohol duty will be frozen until February 2025, benefitting 38,000 pubs across the UK.
The ISA system will also be reformed with the creation of a ‘British ISA’, with an additional £5,000 allowance for investment in UK equity on top of the existing £20,000 allowance.
The new ISA is designed to encourage savers to invest in UK assets and provide businesses with the capital they need to expand.
Steve added: “Overall, there’s the sense there might be an Autumn Statement before a November election.
“It felt like last year’s was the precursor to a big budget, but that hasn’t come to fruition as there were no big tax giveaways or allowance increases in this budget.”
