"Sterling has reacted negatively to the budget statement, losing ground versus both the US dollar and the euro. Against the US dollar, it’s down 1 per cent to 1.4520 while against the euro, it’s down 1.5 per cent to 1.1150 from market open. "Darling said that the UK government will borrow £269bn more than forecast. The total deficit during five fiscal years through until April 2014 will be £703bn, compared to the forecast back in November of £434bn. He stated that the recession will be the worst since WWII. "Darling also said that he expects the UK to return to growth later this year but the IMF thinks that the UK will still be in recession next year with growth of -0.4 per cent following a contraction of 4.1 per cent this year. The markets of course took this news as negative for the pound and so it has dropped off dramatically against a basket of currencies."FC Exchange managing director Nick Fullerton "The Chancellor has missed a vital opportunity to produce a Budget for business survival and economic growth. We called for a real and sustained support strategy, acting as a catalyst for broader economic recovery, but instead we got a Budget that appears to be focused on the next general election. "While some of these measures will benefit low-carbon companies and new technology start-ups, they will do little to restore business and consumer confidence and stimulate economic activity. "Although the long-term unemployed will benefit from investment in job creation and training from 2010, nothing has been done to help businesses retain their existing skilled workforce, which continues to be decimated as a result of the recession. "While welcoming changes to capital allowances and loss relief, the reality is that these will have only provide limited benefit to smaller businesses. In addition, restrictions to the new credit insurance scheme and the failure to address business taxes remain considerable barriers to business survival and growth."FPB chief exective Phil Orford“The key question for this Budget was whether it set out a credible and rigorous path for restoring the public finances to health. The CBI’s preliminary judgement must be that it does not. “The Chancellor’s economic forecasts for next year and beyond look optimistic. By pushing out the horizon for balancing the books as far as 2018 the Government is running too much of a risk. “On the fringes of this Budget, there are some worthwhile micro measures, including support for businesses struggling to access trade credit insurance, and for carmakers through a time-limited scrappage scheme. The changes on investment allowances and the ability for firms to carry forward losses are also welcome. “Taking the Budget as a whole, a lot will depend on how far the Government can reduce public expenditure growth through public service reform and cultural change.”CBI director-general Richard Lambert “So far as business is concerned, there will be widespread disappointment that the main rate of corporation tax is not to be reduced below 28 per cent. This will see the UK become an increasingly less favoured location for international businesses. UK companies with significant and profitable overseas subsidiaries will be relived to see that the improved tax treatment will be implemented by the Finance Bill 2009, but will have concerns about the related interest restrictions brought up by the proposed debt cap. “Small businesses will be disappointed that the Chancellor has not responded to calls to rescind the increase in the small company’s corporation tax rate to 21 per cent. It would not have cost much to reduce the rate to 20 per cent but they may be more optimistic about the improvements announced to the Business Payments Scheme which allows businesses to phase tax payments when they are in temporary financial difficulty. “The Chancellor has said that a principal theme of his Budget is to protect jobs, but it is disappointing that more widespread measures such as temporarily reducing Employers National Insurance Contributions are not included. Similarly, few businesses will see this as a Budget simplifying taxation despite pressing imperative for UK tax simplification.”BDO Stoy Hayward senior tax partner at Stephen Herring “Today we got a pick and mix Budget of recycled announcements from a government skilled in raising people’s hopes but incompetent at actually delivering help. This Budget is a political supermarket sweep of random promises, without even a hint of a plan or any likelihood the promises will be put into practice. "The biggest disappointment in this Budget is its failure to sort out Britain’s unfair tax system. To put money into people’s pockets to help them make it through this recession. Britain’s taxes are too heavy on those who can least afford it. And too easy to avoid for those who know how. The 50p rate will further encourage the very wealthy to avoid tax unless we tackle the unfair loopholes they exploit.”Liberal Democrat leader Nick Clegg “This is an unwelcome challenge to competing effectively. From next April, a year earlier than expected, the UK will rank 18th among the G20 economies in terms of income tax and social security rates for senior executives, based on current rates. The change applies to both domestic and overseas high-earners working in the UK. “This increased tax take could accelerate the movement of high earners and top performers in industries like finance and technology to other established and growing economic hubs. Countries like Switzerland will look increasingly attractive to some of the people in the key industries needed to lead the UK out of the recession. "Companies relying on expatriates earning over £150k in the UK will face significantly increased employment costs – they will now pay £1 in tax for every £1 spent on providing essential benefits, such as housing and cost of living allowances.”PricewaterhouseCoopers international mobility partner Sean Drury“In what has been the most crucial budget in decades, the FSB is disappointed that small businesses have been largely ignored. We welcome moves to focus on jobs and job creation for young people, but we are very disappointed that this budget will do nothing for those firms which are doing their best to hold on to their valued employees. A government funded wage subsidy for short-time working would have been a real help but was totally ignored. “Small firms will also be disappointed not to have received the benefit of automatic rate relief. This will have boosted small businesses to the tune of £400m. With a quarter of business failures due to late payment and around £38,000 owed to small businesses at any one time, Companies House should have been given more powers to name, shame and fine companies which fail to pay on time. The government has missed an opportunity to save thousands of businesses and the jobs they create. “We welcome the fact that Capital Allowances for firms investing more than £50,000 will double to 40 per cent. But small firms will be sorely disappointed with the 2p rise in fuel duty from September which is just another tax at a difficult time.”FSB national chairman John Wright Related articlesBusiness-lite Budget exposes government debt levelsDarling’s tax hike will hurt business ownersBudget holds little for entrepreneurs Picture source
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