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AUTUMN BUDGET 2018: H&W CHAMBER OF COMMERCE

Home / News & Opportunities / Chamber News

Date: 01/11/2018

Herefordshire & Worcestershire Chamber of Commerce has provided insight into some of the announcements made by the Chancellor at the Autumn Budget 2018.

On Monday 29 October 2018, Chancellor Phillip Hammond delivered the last budget ahead of the UK’s formal exit from the EU in March next year.
 
Amidst a period of political uncertainty, the British Chambers of Commerce (BCC) thanked the Chancellor for responding directly to calls to support the business community who are struggling with business rates, the Annual Investment Allowance and the new Apprenticeship Levy. 
 
Dr Adam Marshall, Director General of the BCC, said: “We are delighted that the Chancellor has listened to the voice of Chambers of Commerce and has boosted the Annual Investment Allowance to £1million. This will be a huge shot in the arm for businesses across the country, giving many thousands of firms renewed confidence to invest and grow.” 
 
The Chancellor’s budget has been largely welcomed by businesses in the two counties, and has sent positive signals to companies across the UK by avoiding major increases to business tax to fund the government’s spending priorities. 
 
The budget at a glance:
 
Investment in the West Midlands
 
The Chancellor’s budget has brought some welcome announcements for businesses in the West Midlands.
 
Following the success of Worcestershire’s bid for government funding earlier this year for the new 5G test-bed, the West Midlands Combined Authority has seen an investment of £70m in the UK Mobility Data Institute, and the 2022 Common Wealth Games in Birmingham will receive an investment of £165m.
 
Business Rates
 
Business rates will be slashed by a third for retail properties with a rateable value below £51,000 for 2-years from April 2019. This is an announcement welcomed by many local companies who feel that the current cost of doing business is extremely high as outlined in the Chamber’s Business Manifesto for 2018.
 
An alarming number of high street firms, including independent stores, are closing or being earmarked for closure. The deterioration of the high street has cost thousands of jobs since the start of the year, and for many of these firms the tipping point has been the burden that business rates place on them.
 
The Chancellor also revealed that the National Living Wage will increase to £8.21 per hour, which could have a knock-on effect for the local business community, especially those in the Tourism and Food and Drink industries. The rise will undoubtedly put upward pressure on the skilled-worker’s wage. 
 
Firms may struggle to remain competitive in the current labour market, and so the Chamber, in partnership with Hewett Recruitment, have produced a salary and benchmarking report for local firms to understand the minimum, maximum and average salary of local roles. To find out more about the Salary & Benefits survey, please contact daisier@hwchamber.co.uk.
 
Apprenticeships
 
Earlier this year, the BCC called for a reform of the new Apprenticeship Levy to ensure that businesses and young people were maximising the full potential of the new funding system, and taking advantage of alternative routes to Higher Education and work. 
 
Through Quarterly Economic Surveys (QES) conducted during the year, Herefordshire & Worcestershire Chamber of Commerce recently found that 66% of businesses have experience difficulty in recruiting suitably skilled staff, with 60% of those operating below full capacity. 
 
The Chamber has been working hard to facilitate a greater collaboration between the worlds of business and education, enabling our next generation economies to be flexible, highly skilled and world class.
 
The Chancellor revealed a package of reforms to strengthen the role of employers in the apprenticeship programme, including the SME Apprenticeship Co-investment rate being halved to 5%. 
 
Furthermore, up to £450m is available to enable levy paying employers to transfer up to 25% of their funds to pay for apprenticeship training in their supply chains, with a further £5m to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, to identify gaps in the training provider market and deliver more Apprenticeship Standards. 
 
Digital Services Tax 
 
Retailers over the past year have struggled to compete with online companies, and the new digital services tax is welcomed by many in the industry. 
 
From April 2020, the new 2% digital services tax will be applied to organisations that generate global revenues from in-scope business activities in excess of £500m per annum. 
 
Whilst the tax is due to come into affect from April 2020, this may change depending on what the OBCD decide to do between now and 2020.
 
International Trade
 
The Chancellor unveiled a commitment from HMRC to halve the time it takes to approve customs trusted traders within two years (including “Authorised Economic Operators” or AEOs).
 
The Department for International Trade (DIT) will expand its network of advisers in Europe.
 
From summer 2019, citizens of the United States, Canada, New Zealand, Australia and Japan will be able to use the e-passport gates at UK ports. 
 
Sharon Smith, CEO at H&W Chamber, said: “I am thrilled that the Chancellor has listened to calls from Chambers of Commerce who lobby on behalf of their Members to raise awareness of key business concerns.  
 
“With now just four months to go until the UK makes its formal exit from the EU, I am delighted that the Chancellor has put a well-needed business growth and investment focus on the final budget of the year. 
 
“Businesses in the two counties have remained resilient despite the politically turbulent period, and I hope that the latest budget will alleviate the pressure of business concerns as we head towards Brexit.”
 
Following the Chancellor’s announcements, the Chamber was delighted to host its “Budget Buster Breakfast” in association with Patron Bishop Fleming to discuss how the statement will affect the local business community. 
 
Chris Walklett, Head of International Tax at Bishop Fleming, said: “The Chancellor was trying hard to play a deft hand. Pandering to the DUP with more support for Northern Ireland, whilst trying to calm the furore over Universal Tax Credits, both of which are presenting a real and present danger to achieving what already appears an impossibility: getting Parliament to agree to a Brexit deal.  
 
“It was a good to see a focus on supporting entrepreneurs and the knowledge economy under the head of ‘Enterprise Tax’, and the Chancellor explicitly stating – ‘Britain is open for business’.  It needs to be, and UK business owners increasingly need to look to international export markets, to grow their businesses, and address the potential fallout from Brexit.”
 
With Brexit now only months away, now is the time to explore how expanding your horizons overseas could take your business forward. The Chamber is delighted to partner with Bishop Fleming on its upcoming International Business Conference on Thursday 29 November, at Sixways Stadium. 
 
The event will welcome speakers from the USA, Ireland and The Netherlands, who will be presenting on how to take advantage of these respective markets, whether for growth or to manage Brexit. The conference will include an update on the latest Brexit issues from Bishop Fleming’s Brexit team, but just as importantly, it will showcase and signpost international solutions.
 
To book your FREE place or to find out more information, please contact Emily Rowe at ERowe@bishopfleming.co.uk

To find out more about the budget, please visit Bishop Fleming's summary here