SME finance professionals are concerned about the impact of the Budget on an already complex tax system and its “lack of direction to promote economic growth”.
A survey by the Association of Chartered Certified Accountants (ACCA) draws on feedback from finance professionals working with or in SMEs, and suggests “overwhelming concerns” with a fiscal plan that is widely seen by the business community as prioritising welfare spending over economic growth.
The survey findings reveal a clear picture of business sentiment, says the ACCA:
- damaging growth: 80% of businesses believe the Budget's measures will have a “negative” or “very negative” impact on the UK economy.
- stalled investment: expectations of future investment have plummeted, with almost two thirds (64%) stating they are now “less likely to invest” in the next year.
- recruitment freezes: the labour market is set to suffer, as 66% of businesses indicate they are “less likely to recruit” new staff following the rise in the national minimum wage and freeze on tax thresholds.
Lloyd Powell, head of ACCA Cymru/Wales said:
“This Budget should have been the opportunity to create a clear message for Wales, one that prioritised stability and certainty in how to get the economy moving again. Instead, we have seen more tax complexity through the continued use of ‘tweaks’, rising wage costs and greater regulatory burdens – leaving many businesses considering redundancies, downsizing or moving operations overseas.”
ACCA urges the UK Government to present a coherent, long-term economic strategy that prioritises private sector investment and provides the stability needed for sustainable growth, moving beyond ad-hoc policy shifts.
Lloyd Powell added:
“The combination of increased minimum wage rates, frozen tax thresholds, dividend tax hikes and new NIC charges is destroying incentives to work, train or invest. The UK Government needs to deliver long term plans with confidence, rather than relying on short termism thinking that results in economic stagnation and reduces trust in the business community.”
