This week saw Chancellor George Osborne’s third budget announcement, unfortunately although announced with much fanfare, the majority of the headlines measures had been leaked to selected press prior to Wednesday. However it certainly was a Business Friendly Budget and ‘Unashamedly backed business and aspiration’ – GOOD.
It’s not my normal stance to write about politics as you will always inadvertently piss somebody off and others will get the wrong end of my stick, but these are two issues that regardless of which political party you support I think should be supported by us all as they provide support to businesses and therefore HELP EVERY employed person in the UK.
The two measures I’m talking about are the reduction in Corporation Tax and the 50p tax rate moved to 45p – both of which are good for UK businesses.
Corporation tax coming down 1% immediately and then staying at 22% from 2014 is a great step in the right direction. Of course there are few other taxation elements that need to be addressed which is why some business leaders have still got their knickers in a twist – such as the business tax of 5.6 per cent and lower allowances in capital investment. But overall the corporation tax reduction should be widely accepted as good thing. It allows businesses more flexibility to invest in infrastructure, people, and expansion or at the very least put it into their reserves should they hit troubled waters – therefore helping to protect jobs.
Reducing the 50p top rate to 45p again is another sound business move – of course the acquisition from Labour politicians was ‘why cut the top rate of tax when the rest of the population are struggling?’ and they do have a point to an extent however it is perverse to tax rich people just because we can, the evidence over the last 100 years shows us that lower tax levels actually increase the GDP of an economy thus making it easier to do business in a country. I felt Labour’s response was almost tribal rather than actually considering what message the 50p rate sends to business leaders across the world. We live in a world of high mobilisation and if you penalise too highly or what they consider disproportionately then they will just live somewhere else and take their tax revenue with them. The world has changed in the last 10 years and politicians have to consider these differences when making tax law in the 21st Century.
Obviously I set up Mellor&Scott 3 years ago in the middle of a recession and both of these measures are wholeheartedly supported as a step in the right direction. Hopefully the Chancellor will be supported in a year’s time with how business has reacted to these measures and will be encouraged to go further with even more business friendly measures.
Until then, let’s crack on and work hard!
Paul Mellor, Design Director