Budget reaction from KPMG, Sage, Active and Armstrong Watson

With a potentially transformative General Election looming before the end of this year, the 2024 Spring Budget sent a vital message to businesses and consumers across the North East, with highlights including the new North East Mayoral Combined Authority getting more than £100million in  Trailblazer money which gave the green light for the vast Crown Works  Film Studios project, and Darlington being given more than £20million.

• The Northern Echo is hosting a live Budget event on March 14 - and you could take part. Details and tickets HERE

KPMG

Ian Beaumont, Newcastle Office Senior Partner at KPMG in the UK said: “The North East has a lot going for it, with companies choosing to invest in our region and with incredible sector expertise in areas like clean energy. The news of a North East trailblazer devolution deal is exciting for our region and businesses will be eager to see how this deal with the new North East Mayoral Combined Authority comes to life to help to stimulate growth and investment.

“The Tees Valley Investment Zone’s focus on the digital and creative sectors will help to attract investment and stimulate economic growth and job creation. Businesses in this sector will be looking out for further details to help them plan and invest for the future.”

Daniel Head, Head of Tax in the North at KPMG in the UK said: “Personal taxation was this Budget’s main story. The further cut in National Insurance will help individuals and should not have a big impact on employers provided they can update payroll systems in time.

"And the announcement on scrapping the non-dom tax regime will have caused a stir in the market among high net worth individuals who may be set to lose out. This could have a knock on impact on businesses with highly paid non-domiciled employees.

“The draft legislation on full expensing to apply to leased assets will be welcomed by businesses but the uncertainty on timelines will mean that they will not be able to confidently act on any benefits until they know when it will come into effect.

“We now await news of an election date, and depending on when that is, we could still see some more rabbits pulled out of the hat in an attempt to attract voters before they head to the polls.”

Sage

Steve Hare, Sage, CEO: "The Budget announcement was a great opportunity for the Government to set an ambitious digital strategy with the tech standards and incentives to empower small businesses to grow and take advantage of AI. The AI Upskilling Fund pilot is a starting point, but the Government missed the chance to fully support SMBs with their digitalisation journey and bring in measures like e-invoicing and tax incentives to improve investment in digital technology.

“We welcome the Chancellor's ambition to turn the UK into the next Silicon Valley, but this dream cannot become a reality without a fully digitalised economy that all businesses can benefit from."

My Property Box

Ben Quaintrell, the founder and managing director of estate agency group My Property Box, which has offices in Darlington and Newcastle, said: “The reduction on Capital Gains tax from 28% to 24% will benefit those seeking to upsize, generating some increased market activity. However, it may also encourage some landlords to sell up, shrinking the private rental sector at a time when demand is outstripping supply.

Ben Quaintrell (Image: Ben Quaintrell)

“The Chancellor also announced the scrapping of tax relief on furnished holiday lets which may deter investors operating in this sector, while potentially increasing the number of homes available for long-term lets in areas where property is traditionally in short supply.

“The Spring Budget has missed an opportunity to stabilise the housing market and improve homebuyers’ prospects by avoiding long-awaited measures including stamp duty reform, a proposed 99% mortgage scheme, together with a concerted effort to prioritise the expansion of the nation’s housing stock.

“I am heartened by predictions that the interest rate is set to fall below 2% within months and the economy is expected to grow by 0.8% this year and 1.9% next year  - creating a more stable and positive environment for business.”

Active Chartered Financial Planners

Karl Pemberton, managing director of Thornaby-based Active Chartered Financial Planners, said: “The Chancellor offered some positives measures in the Budget such as in confirming pension changes and reducing the tax burden on working people.

Karl Pemberton (Image: Karl Pemberton)

“His introduction of an additional ISA allowance for British investment is welcome recognition that there are significant challenges, but it may be a drop in the ocean compared to the changes needed to deliver sustained growth.”

Scott Bros

Bob Borthwick, a director of Teesside-based recycling experts Scott Bros, said: “The main encouragement is that inflation is expected to fall below 2% over the next two months which, together with individual tax cuts, may translate into more vibrant economic conditions which stimulate demand.

“The Chancellor was severely constrained financially in what he could achieve, so the Spring Budget contained little that is groundbreaking or has not already been announced.

“However, I do welcome the fact that the 5% increase in fuel duty will be frozen for another 12 months, although this does nothing to reduce our current operating costs. I also support the additional £120m investment in green industries, including offshore windfarms and carbon capture and storage, as part of the UK’s transition to a low carbon economy.”

Armstrong Watson

Becky Bowness, Armstrong Watson’s Head of Tax, said: “Unsurprisingly, given an impending election, there was a lot of political bluster and not a lot of content in this budget. We already knew the headline grabber – a 2% cut to National Insurance Contributions for employees and the self-employed - but that doesn’t help employers, who will be faced with the increase to National Minimum Wage in April, and it also does little for fiscal drag given no change to income tax thresholds.

Becky Bowness (Image: Becky Bowness)

“While we didn’t expect anything for corporates, with full expensing and changes to R&D schemes announced in the Autumn, nothing was announced on business rates, which is fundamentally a huge cost to any business, and we had hoped for more support for family and owner-managed businesses. The 12-month freeze on alcohol duty will be welcomed by those in hospitality and also the extension of the fuel duty freeze for many businesses.

“While the increase of £5,000 to the VAT threshold is welcomed it falls short of the hoped increase to £100,000 particularly given the seven-year freeze and recent inflation.

“The Government is attempting to reduce UK debt so the Chancellor’s options to provide fundamental tax reductions or support were limited - but that doesn't help the businesses that are crying out for help.”