TALK TO A SPECIALIST
The Autumn Statement
What you need to know
Rob Russell, Divisional Head of Reed Finance, summarises the key points from the Chancellor's statement
This year's Autumn Statement was optimistic but measured. On one hand, the Chancellor told us "Britain is moving again" but on the other, he was firm in his emphasis that "the job is not done". So, is it time for your business to invest, or would it be better to wait to see if the sun is definitely shining? Here are some of the key points to help you decide:
- The positive news is that growth forecasts have more than doubled from a weak 0.6% to a much more amenable 1.4% for 2014. While some critics say it's going to be a slow recovery, the news that we're expecting steady year on year growth across the economy is good news for accountancy and finance professionals – many of whom are already feeling a positive change in the wind on the economy.
- With unemployment falling, and jobs on the rise, the economy looks to be back on track. As an extra measure to tackle youth unemployment, National Insurance contributions for employees under the age of 21 have been scrapped, which should be positive news for young people looking for work, and employers keen to invest in young talent.
- The government has reached out to the shale industry and created a tax regime more competitive than the US, where the sector has already had a huge impact on the energy market. This could see a host of large corporate accounts opening up on the horizon for accountancy and finance professionals.
- Business rates in England will be capped at 2% rather than linked to the Retail Price Index rate of inflation. While businesses across the board can benefit from this, many feel the Government should have gone further and frozen rates, rather than capping them. However, small businesses moving into vacant high-street properties will receive a 50% cut – great news for small accountancy firms, but only if they are the right size in the right place!
- The Government announced it will now charge foreign property investors capital gains tax to put them on a level pegging with UK residents when it comes to selling property. There have been some calls from the property sector that this will hamper a buoyant housing market. Time will tell if it has a significant impact on the sector and financial professionals within it.
- From April, a new tax relief is to be introduced for investment in social enterprises and new social impact bonds.
- Employers across the board will be affected by the change in state pension age. Although the timescales for the change are long, the workforce is inevitably going to get older and this should be seen as a good opportunity for businesses able to harness the experience of older workers and the ambition and innovation of those starting out.
All in all, it looks like a broadly positive Autumn Statement for business, reflecting the Chancellor's previous Budget comments that this Government will "unashamedly back business". In many sectors, finance and accountancy professionals can be quietly confident that the economy is on the right track.
Rob Russell, Divisional Head of Reed Finance