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Welsh Business Leaders Reaction to Autumn Statement

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In the wake of the Chancellor's Autumn Statement, leaders from various sectors across Wales have voiced their perspectives and insights on the implications of the government's financial plans.

Their comments shed light on the potential impacts and opportunities that lie ahead for the economy, businesses, and individuals in the coming months.

Read the full Autumn Statement here

Richard Selby, Director and Co-Founder Pro Steel Engineering based in Pontypool

“I was delighted to hear that £50m has been allocated over the next two years to increase the number of apprenticeships in areas including engineering and we need to ensure this benefit is felt here in Wales given the skills shortage we continue to suffer from. The 9.8% minimum wage increase will be invaluable to all during this cost of living crisis, and this has tried to have been balanced to business owners with the introduction of the full expensing business tax break made permanent which will be welcomed by many. SMEs however will be wondering how to overcome this cost rise in their forthcoming budgets for 2024.”


Frank Holmes, Partner at Gambit Corporate Finance LLP and Chairman Of The REGP Board at Cardiff Capital Region said:

It's encouraging to witness the initiatives unveiled in today's Autumn Statement, which are aimed at bolstering the productive capacity of the U.K. economy.

In general, the emphasis on extending and enhancing R&D tax credits and promoting technology-driven manufacturing is a positive development and is warmly received.

I am thrilled to observe the establishment of two investment zones in North and South Wales. I am particularly pleased that the southern zone will be overseen by the new CCR corporate entity.

Additionally, the prospect of the U.K. infrastructure bank supporting the compound semiconductor sector, along with the planned addition of 12 GW of floating offshore wind in the Celtic Sea, presents exciting opportunities for sustainable and robust economic growth. From my perspective, the optimal way to harness this potential is through the implementation of a comprehensive industrial strategy at the U.K. level, and I have confidence that CCR can make a significant contribution to this effort.


Welsh Retail Consortium director Sara Jones said:

“The Chancellor has botched the chance to freeze the business rate for the majority of businesses. This short-sighted decision means the medium-sized and larger retailers across the UK who underpin the vitality of our town and city centres and employ the vast majority of retail workers are now staring down the barrel of a hefty £540 million hike in their business rates bills from next Spring. A hike of this magnitude will put upward pressure on shop prices and undermine efforts to rejuvenate high streets and retail destinations. This misstep is the antithesis of the Prime Minister’s anti-inflation strategy and recently unveiled long term plan for towns.

Hopefully, the Welsh Government’s Finance Minister will take a more enlightened approach and go further and freeze the business rate or at least blunt any uplift in next month’s Welsh Budget.”


James Howells, Managing Director,  The Monex Group based in Newport

“I was disappointed not to hear anything about fuel duty within today’s Budget headlines given that we have a fleet of over 150 vehicles on the roads. While the increase to the minimum wage to £11.44 per hour, which comes into force in April, will be a huge blow to many British businesses, the full expensing business tax break being made permanent will definitely be a positive to those larger companies with money in the bank to spend on assets.

The announcement for employees regarding the 2% decrease in national insurance payments will however be very much welcomed by our 270 strong team.”


Lloyd Powell, head of ACCA Cymru/Wales, said:

“With confidence amongst SMEs low, the Chancellor needed to announce a series of measures to boost investment. Today’s statement includes a number of positive steps, including simplifying and reducing tax for self-employed individuals, as well as action on late payment and an extension of business investment incentives.

ACCA Wales welcomes the announcement of the second investment zone in Wales in Wrexham and Flintshire.

“Several of the announcements, for instance on apprenticeship funding and business rates relief, do not impact directly on Wales as they are devolved matters.

“There will be additional funding for the Welsh Government via ‘Barnett consequentials’ as a result of some of the announcements. We await the draft Welsh Government Budget to be published in December.”

PENSIONS, PAYROLL & NATIONAL INSURANCE REFORMS

ACCA welcomes the interesting proposal requiring employers paying into an existing pension pot if they choose, however it should be executed in a way that minimises administrative burdens and complexity for business.

“Whilst the short window required for implementation will be welcomed by those in receipt of a pension, payroll providers are now under an extraordinary pressure to be able to plan and deliver changes to NI, payroll and pensions in record time. Further clarity around the expectation of delivery is required, and we will work with ACCA members to ensure implementation runs as smoothly as possible.

“It will be interesting to see what the impact on the reduction of Class 4 National Insurance will have on whether incorporation remains the most tax effective route for most small businesses. ACCA has always maintained that incorporation should be for sound business decisions rather than a tax-led one.

“The reductions in NICs obligations for the self-employed help reduce the long established distortion between incorporated and unincorporated business formats for the smallest businesses.”

CAPITAL ALLOWANCES

“We welcome the confirmed plans to make full expensing permanent for businesses – this will encourage business investment by companies and lead to increased growth.

“This provides certainty and stability for business, something we have called for increasingly over the past 12 months. Encouraging investment in businesses and incentivising it through improved capital allowance expensing is a step in the right direction to promoting longer term and stable economic growth that the UK needs.

“How this will trickle down to SME businesses who already have AIA and will navigate both reliefs is something we will observe over the coming months.”

DIGITALISATION & SIMPLIFICATION OF TAX

“The government announcement that the threshold for Making Tax digital (MTD) remains at £30,000 will disappoint some who wanted the figure higher, but at least there is relief it is not lower.

“Our members have expressed concern about how tax simplification is progressing since the abolition of the Office for Tax Simplification (OTS), and about HMRC service levels.

“Simplicity, certainty, and stability as the cornerstones of a good tax system. A simpler tax system avoids the potential for mistakes and enquiries, which too often distracts HMRC from addressing serious and deliberate evasion, as well as being better suited to digitisation.”

BUSINESS FINANCE

“With confidence amongst SMEs low, the Chancellor needed to announce a series of measures to boost investment. Today’s statement includes a number of positive steps, including simplifying and reducing tax for self-employed individuals, maintaining rates relief for hospitality and freezing the small business multiplier, as well as action on late payment and continuation of business investment incentives.

“The announcement of new Investment Zones in England, plus another in Wales, is welcome news and we look forward to seeing these develop over the next 12 months.

“While we need to ensure that certain measures, such as proposed pension reform and increased data requirements from HMRC don’t add additional administrative burdens on employers, overall these measures will all be warmly welcomed by small firms across the country.”


FSB Wales Policy Chair, Ben Francis, said:

“The action the Chancellor has taken today responds to both the concerns and ambitions of Wales’ small businesses. We welcome the fact that the Chancellor has listened to the calls made by FSB to take action on the scourge of late payments, extend support for businesses in our high streets and provide much-needed help for the self-employed.

On Business Rates 

Business rates are one of the most significant single costs facing smaller businesses and the disproportionate burden of business rates disincentivises growth among smaller businesses on the high street at a time when revitalising those high streets and reinforcing our communities should be a priority for Welsh Government.

The extension of business rate support for hard-pressed retail, hospitality and leisure businesses in England generates consequential funding for Wales. In the coming Welsh Government Draft Budget, small businesses in Wales will expect to see that support replicated with the extension of Welsh Government’s own support scheme, a call FSB has recently made to the Minister for Finance, Rebecca Evans.

On late payment 

We’re pleased to see the Chancellor has listened to our calls by condemning poor payment practices and announcing a clamp down on late payments. Enshrining prompt payment practices for Government contract bidders is not only the right thing to do –it will also lessen the stress and strain many small business owners face, while giving them the headroom to invest in their own businesses.

We look forward to working with governments both in Westminster and Wales to ensure we drive out bad payment practices, ensuring businesses are paid on time and that they can confidently supply to public and private customers.

Self-employment tax 

Additionally, we’re pleased to see the Chancellor listen to our calls regarding the self-employed. The decision to reduce the rate of self-employed National Insurance and abolish the Class II element will go some way to ease the burden on the entrepreneurs and self-starters we want to encourage in Wales.

Overall, it’s been good to hear today that the chancellor has listened to FSB’s calls, and thereby to Wales’ small firms.

Investment Zones 

We welcome the announcement of an Investment Zone covering Wrexham and Flintshire. While there is much detail which will yet be needed on how this will look, it gives the opportunity to create and build on our regional economic strengths in that area and understand how that can be used to grow innovative and ambitious smaller businesses and supply chains. We look forward to working with partners in government and industry for this new zone.


Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said: 

“Chambers Wales South East, South West and Mid is pleased that the Chancellor has listened to calls to help businesses tackle the current economic challenges by offering solutions to the ongoing investment problem, and welcomes the remedies of providing some certainty for companies wanting to invest. Businesses in Wales would have been looking to today’s Autumn Statement for a clear strategy and actions to improve long-term growth and boost investment and today’s Budget is a positive sign that businesses were wanting.

“We are delighted to hear the Chancellor championing ambitious SMEs and our high street businesses, providing useful measures that alleviate the cashflow problems they face in terms of ending late payments and making full expensing permanent to support SMEs in the short-term and incentivise investment in the long-term.

“The ongoing skills shortage is a concern for many businesses in Wales with over three quarters (77%) of Welsh businesses experiencing difficulties recruiting suitable skilled staff in Q3 of 2023, according to our Quarterly Economic Survey. Training and upskilling employees is a vital cog in economic growth for Wales and the government’s plans to support people back into work has the potential to help grow the economy. Supporting local business investment is the lifeblood of local economies, creating jobs and supporting public services.

“The new investment zones are a welcome sign that Wales’ potential is being taken seriously and the grid upgrades will be welcome news to businesses in the transition to achieving the net zero ambitions Wales has. The Chancellor has today taken a step in the right direction, but nothing can be taken for granted and we must all continue to focus on encouraging companies to grow.

“With forecasts predicting small growth increases of 0.6% this year and 0.7% in 2024, firms will be hoping that the 110 measures planned by the chancellor to help grow the economy will come to fruition.”


Greg Tait, financial planner in RBC Brewin Dolphin’s Cardiff office, said:

“In terms of rewarding work for the least cost to HM Treasury, reducing NI is the most efficient tax to reduce as it only benefits those in work. Whereas income tax is also paid by pensioners earning over the personal allowance.”

“But the bigger picture is that the personal allowance and higher-rate income tax threshold haven’t been increased since April 2021[1] and are due to remain frozen until 2028. This could see more people drifting into higher tax bands because of inflation and paying a much bigger tax bill as a result. Our analysis shows that an individual who earned £50,000 in 2021, and whose income rises in line with actual and forecast consumer price index (CPI) inflation[2], could see their income tax bill rise from £7,486 to £15,094 by 2028.

Move to one pension pot for life.

“Currently, employers automatically enrol new staff into a pension scheme chosen by the company. This can result in employees accumulating multiple different pension pots throughout their career. Ensuring that after multiple jobs your pension could follow you for life, is a welcome idea. It will require significant change in the current default arrangements for many employees and may be an admin headache for employers. But it is a welcome move if it helps kick start a savings culture and helps individuals in their retirement planning.”

ISAs.

“The move to multiple ISAs was not mentioned by the chancellor but is very welcome. From April 2024, individuals will be allowed to open and pay into multiple ISAs of the same type in a single tax year. Someone could, for example, open two Investment (stocks and shares) ISAs or two cash ISAs. This could enable them to try out different providers or open a new cash ISA as soon as a new deal becomes available.”


Steven Owen, Managing Director of building firm Pave Aways, said:

Jeremy Hunt’s Autumn Statement included some positive announcements.

“I wholeheartedly welcome the Chancellor’s focus on business and growth, particularly business tax cuts and the extension of the “full expensing” tax relief scheme which is vital to support investment.

“The creation of an Investment Zone focused on Wrexham will bring a big boost to North East Wales and the 110 measures to drive growth will deliver a huge boost for the many small Shropshire and Mid Wales contractors and businesses which make up our supply chain.

“We are passionate about supporting and developing the economy of our local community and I am delighted the Chancellor has recognised the need to help this vital sector.

“I also welcome the changes to the planning system announced in the Autumn Statement. The country needs new homes and we need to get the property market moving again, so anything which removes barriers to planning and development is a positive move.”

Pave Aways, which has offices in Knockin near Oswestry, Newtown in Powys and Wrexham, began life in 1973 as a groundworks contractor before expanding into a full-service design and construction business.

It works on a wide variety of developments, from residential schemes to multi-million-pound new build and refurbishment projects across a wide range of sectors, with clients ranging from local authorities and health boards and hospitals to education providers


Robert Lloyd Griffiths, Director of ICAEW in Wales said:

“The Chancellor has difficult decisions to make when balancing borrowing with the need to control inflation, ease cost of living pressures and drive economic growth. Backing British business, supporting entrepreneurs and boosting productivity will remove barriers to investment and underpin long-term sustainable growth.

“It’s a powerful headline message and the news that Wrexham and Flintshire will become investment zones is pleasing,  but we must see UK Government working with Welsh Government to ensure that in Wales we don’t lose out. Our entrepreneurs and small businesses  can play a starring role in the UK and global economy which is why we’ll continue to work  closely with our members to make sure that their voice is heard and that the positive measures announced today will give us all the opportunity to flourish.”

Business News Wales