Commentary by Carl Hasty, Director of SmartCurrencyBusiness.com:
UK businesses will see some changes as a result of UK Chancellor George Osborne’s Budget report, including a rise in the annual investment allowance to £200,000 a year and gradual cuts in Corporation Tax – now 20% – to 19% in 2017 and 18% in 2020. Tax periods for big companies will be adjusted to be closer to when they receive profits.
The bank levy will be phased out, and replaced with an 8% surcharge on bank profits. This is expected to cost more than the levy, and could mean that banks have to charge higher costs to customers in order to maintain profit margins. This means that UK businesses could be better off looking for alternative providers of finance and financial services.
The downward revision of global growth was also mentioned, with the Office for Budget Responsibility (OBR) projecting Gross Domestic Product (GDP) growth of 2.4% for 2015, down from the 2.5% forecasted in the March Budget.
The report implied that a more productive workforce and higher levels of private investment would help to improve productivity, but did not go into detail about how UK productivity is meant to improve. It also did not mention how it would address the previous Coalition’s target of £1 trillion in UK exports by 2020. A special export task force had been announced prior to the Budget report, but there were no details as to how UK exporters are to grow and thrive, particularly given a struggling Eurozone, strong sterling, and the China stock market crash.