Spring Statement live reaction
At 12:30 today, the Chancellor delivered his Spring Statement. We sought the views of small business owners around the UK. They will keep appearing here until 5pm.
24 responses from the Newspage community
Star Quote
"What planet is the Chancellor on? Am I missing something here? What average household can afford to insulate their house or fit solar panels? People on low incomes simply don't have the financial spending power to make these changes to their houses. There was some good news for small growing businesses with the expansion of R&D and business investment tax, 50% drops on business rates, but they were too high to start with, and a huge barrier for new businesses who want a high street presence.
"Crucially, nothing was announced for small businesses that don’t pay rates, who need grants to help them to recover from the pandemic. And employers will feel the pinch on employers contributions. This will leave businesses feeling even less confident about the future."
Star Quote
"This Spring Statement has just consigned vast swathes of the British public into a downward spiral into poverty. This is tinkering around the edges as Rome burns. It was political spin, squared. We hear that inflation will peak at 7.4%, which is not true. It's going to be double that. We hear that the Chancellor is saving motorists with a 5p fuel duty cut, which is nothing short of urinating in the breeze when the average cost of a litre of diesel is up from £1.48 in January to £1.78 today, a rise of 30p. A reduction in the cost of making homes energy-efficient is excellent, but there's one problem. Most people don't have the money to spend on making their homes energy-efficient. If you're already struggling to get by, being told to insulate your home and pay for some solar panels is probably not at the top of your priority list. The National Insurance tax hike is still going ahead; however, it's good news that the NI threshold has been increased, as is the announcement of an income tax cut at the end of the parliament, although this won't stop the recession. Sadly, everything announced today goes no way to fix what we have coming over the horizon. We have just had the worst Spring Statement from the worst government in the worst circumstances possible."
Star Quote
“For small businesses, there are some small nuggets that will benefit owner managed businesses employing a handful of staff, such as the Employment Allowance increasing to £5,000 or the NI Threshold increasing to £12,570 to match the income tax personal allowance threshold. This will be welcome for Directors paid at the tax threshold and make a difference to low earners.
However the Health & Social Care levy remains and big investment decisions or cuts have been kicked down the road with a review of the Apprenticeship levy, investment in training, R&D adjustments or a cut in income tax dropped into the Autumn budget or later this parliament. With rampant inflation and rising costs, will businesses survive until the next budget to benefit from those announcement?
With bumper tax receipts E132 Billion higher than the same period last year, the Chancellor had a lot more in his war chest and has sent UK businesses and struggling families downstream without a paddle.”
Star Quote
"So we get some financial help if we choose to install solar panels onto our homes, but the Catch-22 is that the vast majority of people don't have the money to do that. They can't even heat their homes, let alone buy solar panels. Solar panels are not cheap, they're a hefty investment. Also, what happens to families living in flats? How can they save without investing heavily? As an example, the cost of a solar panel system in the UK is approximately £4,800 for a 4 kilowatt (kW) system, typically including 12 panels at a 330 Watt peak (Wp). Very few people can afford that amount of money. On another note, the extra cash to help vulnerable people is welcomed but again it depends heavily on local authorities, it takes time to reach the right people who really need it. I think there's a lot of improvement that can be done specially for small business owners who need to keep their costs afloat whilst balancing their own personal bills."
Star Quote
"The fuel duty cuts announced today will not go far enough for all the gig economy workers who are on the road delivering our parcels, our takeaways, and ourselves in the case of private hire drivers. This army of workers are living precariously enough as it is, earning a pittance and at risk of not being given any work with no notice. Stratospheric fuel price rises mean that this important part of our economy can no longer afford to work, and sadly this cut simply doesn't cut it."
"This Spring Statement was very underwhelming. It was like throwing a bottle of water onto a burning building and hoping that it will put the fire out. Right now, inflation is spiralling out of control, and nothing material has been announced to bring utility costs under control which will be the biggest burden on the majority of working families and should have been a priority for the Government."
“Whilst the employment allowance is positive, this does not affect the 4.2m small businesses without staff, and most importantly those under 5 employees are STILL excluded from the Help to Grow management and digital schemes. This is a clear indication from this Government where their priorities lie, and to my mind a significant economic error.”
We need to understand that there is only so much the Government can do given the economic situation we are in due to high inflation along with all the uncertainty with the tragic war in Ukraine. The Spring statement looks fair, after all Rishi Sunak is a Chancellor, not a magician. Agree with increase in NI contributions, we must support our NHS as they have been working relentlessly no matter what the situation. The surprise element in the statement was the reduction of basic income tax from 20% to 19% by 2024 - now tell me how many other countries in the world can do that.”
The equalising of NI and income tax makes sense - something which is long overdue. The problem is that this won't do too much to make ends meet for households whose bills have started to get a bit silly over the last few months. And it's only going to get worse.
"There's every chance Rishi Sunak may be back at the dispatch box with new economic measures before too long. The cost of living is set to rise significantly from next month while the ongoing war in Europe creates additional worry and uncertainty. This Budget simply wasn't radical enough given the extraordinary times we find ourselves in."
"Raising the tax free allowance helps everyone including the lowest paid and should be welcomed. I also agree with the Chancellor's general strategy of lowering taxes, while improving incentives for business investment and innovation to drive the economy. However, I'm not sure how many people will be rushing out to buy wind turbines after a VAT cut."
"This was a massively underwhelming mini-budget, with many missed opportunities for small businesses across the UK. Expect many more small businesses to close in the coming months, as the level of support announced just isn't enough."
"A decrease to the basic rate in 2024 is welcome, however, what would have been better is an increase to the thresholds for when tax is paid."
"Equalizing the National Insurance threshold to the same £12,570 level as the personal tax allowance is a very welcome tax break, which will help mitigate some of the cost of living rises, and April's National Insurance increase. But the fuel duty cut, whilst welcome, is barely scratching the surface of the recent petrol and diesel hikes. Making heat pumps and solar panels zero rated for vat is great, but ultimately not going to assist people struggling right now with raging inflation."
"The 5p cut in fuel duty I would question whether we will see this change at the pumps any time soon. Who knows, it may benefit us very slightly in a few months' time. What would have been a welcome announcement is a change to the mileage allowance of 45p that people can claim, it's barely covering the cost of fuel let alone the running costs and depreciation that it should be covering."
"It's like the kettle is boiling on small businesses and families and the Chancellar has dropped 2 ice cubes in and walked off thinking he's done a good job. Smaller businesses are again cast adrift with little by way of support, and whole groups of people completely missed out. We are being squeezed from so many angles and taxing jobs seems like utter stupidity at the moment. The inflation figures are already eye-watering but at least Rishi has given us a tissue to wipe them away with before retreating and leaving people to drown in poverty."
The equalisation of the National Insurance and income tax thresholds was a step in the right direction for people on low incomes but really the Chancellor should have scrapped the NI increase entirely. The drop of 1p on income tax in 2024 feels like jam tomorrow and the 5p drop in fuel duty equates to roughly £3.30 per tank so won't make much difference. He has no control over when the retailers implement it so I'm not expecting to see lower prices at the pumps tomorrow! A missed opportunity to properly address the significant cost of living increases that are squeezing so many incomes and will restrict growth.
Sorry, I am confused.. No help for disabled or pensioners unable to work, living on benefits?? How will the national insurance threshold rise help people who don't pay it anyway??
Meaning that disposable income is non existing, all money will go on heating, electricity, rent, maybe food, but 5p off a litre of petrol is nothing when a litre of fuel is 196.9 per litre at the pumps.
It means small local businesses will miss out because those people won't go out and order food and goods online with the large corporate companies..
To sum up In one word...... "FAIL"
For a UK business owner, today’s Spring Statement failed to throw the lifeline that is so desperately needed to tackle rising costs, NI and tax hikes, skills shortages and supply chain disruption. The reality is businesses need support and they need it now. Waiting until the Autumn Budget later this year I fear will only serve to stunt economic growth which means the challenges around the cost of living will only worsen.
‘Creating a culture for growth’ is a necessity if we’re going to meet the OBR’s forecasts. Reforming tax credits and expanding relief for R&D should really be happening now so that businesses can pick up the pace with innovation. Likewise, businesses need to be able to plan capital investments and with Super Deduction coming to an end next year, they deserve to know if and when measures will be in place to help invest in new technologies to grow and innovate. The Government has promised a lot to businesses, but six months is a long time to wait for this help to materialise.
I work from home, which I'm quickly outgrowing the space, unfortunately soaring prices prove too costly for securing any kind of lease on premises!
I provide a delivery service and so 5p reduction in fuel is not a thing, I'm already struggling with energy costs. The Government have made huge errors in handling the previous two years financial crisis. How is this levelling up?
“This conservative Government is delivering for businesses, the Chancellor says, unless you’re a micro business in which case you don’t count. Some of the initiatives announced today all sound great in principle but sole traders are consistently overlooked. Where do we fit in? This budget was just more smoke and mirrors. Watch the coffers rise up as the help we need depletes."
"Just waiting for the invention of a time machine so we can go forward to 2024 after that Spring Statement. Golly, what a joke."
"Though the Chancellor's announcement that VAT will be scrapped on energy efficiency measures such as insulation, solar panels and heat pumps is a step in the right direction, it's also a classic chicken and egg situation. Many people are struggling to pay their bills and simply won't have the money to make the necessary changes to help them save money on energy. The idea is well intentioned but will not help people currently struggling to pay their energy bills."
“The green VAT measures are really welcome in the light of environmental impact as well as the regimes we have to support if we don't reduce our dependency on oil and gas. I would have liked to have seen more in there for small businesses. Cutting hospitality business rates by 50% is not the same as reforming them wholesale for the retail and hospitality sector. Local shops and businesses need rates reform and have been crying out for that for years. This won't shift the dial much against the tsunami of rising costs in food and fuel. Local businesses will be suffering from the dual challenge of rising costs and customers with less in their pockets, and we need them to stay in business, to stay close to local communities to fuel economic recovery.”