Disappointing and possibly divisive Budget 2024 - but what do I know...

Before anybody reads further I should stress that:

• what follows are my own views
• it is questionable whether I have the authority to say anything as regards the Budget - as only 1 of my 6 predictions for items that would be covered in the Budget came to fruition!
• anyone wanting to hear what a real expert thinks should register for today's (12 noon) post Budget conversation with John Endacott https://meeting.zoho.eu/meeting/register?sessionId=1298748287 and check out https://pkf-francisclark.co.uk/budget-analysis/

But here are my initial thoughts, focusing on some items I felt were disappointing and/ or possibly divisive in the context of a business ecosystem in the South West:

1. A lack of focus climate change - I ended up listening to Radio 5 Live yesterday morning and Nicky Campbell's MP guests did not rate climate change as a number one issue so maybe not a surprise that it did not get a high profile mention in the Budget. ?Disappointing (and can anyone who counters with "costs" of action being a barrier please read the Stern Report...)
2. National Insurance changes - my colleagues and other commentators have stated that the burden of this tax rise will fall disproportionately on businesses with a high number of low paid staff, including hospitality and leisure sector. This does not sound like a stimulus for growth in that sector - a sector that represents a significant part of the South West economy. ?
3. Nothing about the UK Shared Prosperity Fund or a replacement for this - Cornwall has had significant sums of EU and then UK government monies to stimulate economic activity and increase our GVA. ?I had anticipated a soft exit from this but it would appear it is going to be a hard close on 31 March 2025. ?A continuation of this funding could have been useful to assist in helping businesses impacted by NI changes look for ways to increase productivity/ amend their business models. At the same time it appears "the North" will benefit from infrastructure spend
4. BADR changes- ok, the move to 14% and then 18% for capital gains qualifying for BADR is not as bad as some were fearing but it still may deter some budding entrepreneurs from making the decision to start up a business. ?This at a time when the country needs to foster entrepreneurial spirit and in 2023 the South West had the seventh highest total number of start ups for 2023 across the UK's regions and nations (as reported by Punchl!ne).
5. BPR -lifetime cap has not been well received by the agricultural sector, another mainstay of the South West economy.

Now, I acknowledge it was not all bad for businesses in the South West and I was pleased to see whilst there are changes to Employee Ownership Trusts legislation - from my quick read these changes do not seem unreasonable (but again I defer to my learned colleagues for a more a considered opinion).

I will be following my colleague's Insights with interest over the next few days to see what practical advice they are offering up to enable business owners to navigate the tax changes. Personally, I can see an increased need for:

• financial projections
• a fuller understanding of the funding ecosystem
• business valuations
• proactive business advice/ strategic planning.

On the second of these I draw the readers attention to our two forthcoming seminars taking part in Cornwall:

https://www.cornwallchamber.co.uk/events/details/delve-into-debt-breakfast-briefing-12038?calendarMonth=2024-11-01

https://www.cornwallchamber.co.uk/events/details/equity-essentials-breakfast-briefing-12039?calendarMonth=2024-12-01