The Budget and The Great Escape
If you thought you heard the theme music to the film The Great Escape being quietly whistled around Uckfield businesses after the Budget, you were, perhaps, not mistaken, writes Paul Watson.
It may be have been all down to the softening up process the coalition government had put the country through in the lead up to George Osborne’s first Budget. But the verdict can be summed up as: It was not as bad as we feared.
The rise in VAT to 20 per cent from 17.5 per cent from January 4, 2011, was expected by many.
But Mark Arno, of Uckfield High Street store Carvills and a member of the Chamber of Commerce’s executive committee, said: “At least we have time to plan. When the previous government dropped the rate to 15 per cent there was no lead-in time.”
He said there was a feeling that with the rise due in early January it might result in a good Christmas for shops and a flying start to the January sales.
“People will be making decisions on those big ticket items and knowing there is a rate rise might just swing it,” he commented.
He pointed out tax changes make a vast amount of work for businesses; especially shops selling a huge range of products.
Most businesses are to some degree computerised, he said, so making the change at the till was just the press of a button. However, all the ticket prices of goods on display have to be changed.
Sussex Enterprise called it “an honest, tough but necessary budget”.
The decision for a partial rise for employer National Insurance contributions from April 2011 “will mean a tax on jobs at a time when the economy is looking to support job creation.
"The biggest ‘shark in the custard’ for our region is the decision to give a £5,000 NIC tax break to businesses with ten employees or fewer, with the exception of those based in the South East, London and the East of the country.
"The Chancellor said he wants a sign above the country saying ‘Open for Business’. However, clearly, he does not support job creation in the South East, London and the East.
“We ask, are businesses in our region being penalised for their success?”
Mark Froud, Chief Executive at Sussex Enterprise, added: “Overall businesses in Sussex will welcome the measures introduced but with some clear exceptions such as VAT rising to 20 per cent in January 2011, which could impact on consumer spending and ultimately the cost of goods for business.
“Why the Government introduces VAT rises mid-way through the January sales seem illogical. A deferment until the end of the sales period would be more acceptable. A minor point but nonetheless important.”
The Federation of Small Businesses (FSB), whose local office is at Polegate, said the VAT rise would “hurt small firms who will have to pass the increase on to their customers, unlike big business which can absorb the cost”.
Arthur Mapletoft, FSB branch chairman for Eastbourne, Lewes and Wealden, told Uckfield News: “It was not as bad as we were expecting. We were quite pleased.”
The holiday letting business is important in this area of East Sussex and he was pleased planned tax changes would not go through. Mr Osborne said favourable tax rules for furnished holiday lettings, which were due to be withdrawn under the previous government’s plans, would continue.
“We had lobbied quite hard for the proposed abolition of tax changes and I am pleased the Treasury agreed,” Mr Mapletoft said.
Overall, he said, the Budget was “not as devastating as we were expecting”.
“It means small businesses will survive. A lot were expecting to go out of businesses,” he said.
More business news
• Professional Networking has a guest speaker at its meeting on July 14 at the Boship Farm Hotel, 6.30pm.
Shaun Gannon, of Centrim, Brighton University, will make a presentation on developing new business ideas and turning them into economic opportunities.
He works with blue chip organisations as well as SMEs throughout the world, challenging them to broaden their innovation activities and helping instill innovation processes into everyday business operations.
Mark Hosken, a founder member of Professional Networking, said: “All businesses have a set of assets and skills which they mix and match into a unique offering.
“Sometimes this offering can lose its competitive shine - either because it is copied or because the market place moves onto new and better things.
“This session will explore how we can innovate by re-combining the assets and skills we already have. After all, almost every major innovation is purely a new combination of what existed before.”
You will need to book a place – via the Professional Networking website.
• The Uckfield-based Pureprint Group has bought two HP Indigo 7500 digital presses as part of a £1.3 million investment.
See also:
Business profile: Private Wealth Management
Weald Business Solutions latest newsletter
Jobs available at new care home
Marco Pierre White is aiming to bring “an eating, drinking and sleeping experience which is unrivalled in its Englishness” to the Chequers at Maresfield.
Pie maker could move to Nutley
(Added to site Thursday, July 1st, 2010)
