Duncan Cochrane Dyet
In 2022 China built around 2,500 km of railway of which half were high speed tracks. HS2 was originally 330 miles, now reduced to 175 miles, and has taken 14 years to get to this stage. This is sobering stuff and illustrates the necessity of a long-term consistent strategy that cuts across party lines, to enable the UK to compete in the global market. I am looking for a funded infrastructure plan, a funded industrial strategy, and a funded strategy for the sectors that will propel our future growth and attract investment. I want to see the shape of the future spelt out in financial terms. I very much hope the UK’s ambition will not be reduced to tweaks to inheritance tax.
Despite the Chancellor Jeremy Hunt’s previous protestations that his focus continues to be on cutting inflation, with Labour victories in Conservative safe seats in Mid Bedfordshire and Tamworth, along with a better-than-expected Government balance sheet, and hitting Rishi’s inflation target a month early, I’m expecting to see some tax cuts. There have been mutterings about IHT reform, which is likely to be popular, potentially something around capital gains tax, and of course they’ll almost certainly find some way to try and prop up a failing housing market, keeping first time buyers interested and property prices inflated by tinkering with stamp duty.
Expect him to talk about how they’ve steadied the ship, hit Rishi’s inflation targets etc., hoping that most will forget who got the ship rocking from side to side in the first place. My biggest hope is that they don’t do anything too significant and allow the UK’s robust businesses and markets the peace and quiet they need to get on and continue sorting things out.
Mark Lumsdon Taylor
Lead ESG & Sustainability
Business face ‘Extreme weather’ (A relevant term) to grow in the near term. Despite inflationary pressures starting to fall, wage costs continue to rise strongly, demand is precarious following successive interest rate rises – and changes sector by sector.
We know the key test is the Christmas and festive season ‘run’ – up and down the country, business will continue to balance difficult pressures through the winter. The higher cost of capital is also taking its toll on investment, and we would expect that an environment that unlocks business investment in service of sustainable growth and sets out a vision for not just UK, but specifically the powerhouse of the southeast, is priority.
To do this, it’s critical we give business the confidence and certainty to increase investment and capacity in our economy. This Autumn, we must prioritise catalysts for sustainable growth, setting the groundwork for long-term prosperity. Keeping in mind long-term, sustainable economic growth that delivers prosperity for all, in 2 areas:
- Business innovation & Enterprise: Deliver an internationally competitive business environment. To invest, businesses need both certainty and competitiveness in areas like tax and finance, speed and consistency on planning, and a proportionate and pro-innovation based regulatory system. Think strategically and proactively for SME through to large scale corporate.
- Regulatory leadership and ESG Sustainability. Realise the UK’s net zero growth opportunity. For businesses, the journey to a net zero economy is not just a moral imperative but a vital economic opportunity. Despite fierce international competition and a challenging operating environment, businesses remain confident that the economic opportunities of net zero can be delivered. Set out policy longevity and detail that gives firms confidence to invest. We can capitalise on our opportunities with clear strategic planning and commitment. both regulatory and incentivisation (for all sectors – not just Carbon, but also other GHG Emitting sectors – such as Agriculture)
A budget for Growth and confidence. Forward ambitious
According to the Health and Safety Executive 36.8 million days were lost during 2021/22 due to work related ill health. Of this stress, depression or anxiety accounted for 17 million days and musculoskeletal disorders were responsible for 7.3 million days. This represents a huge cost to the economy and a significant burden to the NHS. We believe that tax incentives to encourage the increase of provision of occupational health by employers could increase economic productivity and reduce the pressure on the NHS.
We welcomed the governments consultation in July 2023 into tax incentives for occupational health and hope that the Autumn Statement will bring forward measures to enable this to happen. We would highlight the disparity between large employers and, small and medium sized employers. Many large employers do provide occupational health for staff. However, there is currently relatively little provided by small and medium sized employers. We believe that a focus on simplifying the rules could result in a significant increase as small employers often view the costs of navigating the tax rules as outweighing the benefits.
For example, it is currently unclear whether the cost of apps that allow employees to select occupational health services is a benefit in kind. The cost of debt counselling is exempt from being a taxable benefit in kind, but counselling to avoid going into debt is not. If a member of staff is off work with stress and the employer provides counselling to assist their return, they may need to ask some very sensitive questions, at what is a difficult time, to establish if the stress is related to work, domestic issues or finances and if finances is it debt related.
We also believe that smaller employers would benefit if the distinction between employees being provided with a tax-free benefit and being reimbursed by an employer was removed. If the cost is borne by the employer, the tax treatment should be the same.
There are rumours that the chancellor will cut VAT on period pants from January. Other period products have been zero rated since 2021 and retailers such as John Lewis and Marks & Spencer have been calling for VAT to be removed from period pants as well. This will be a welcome move for women and for environmentalists as using period pants reduce the amount of plastic waste.
We wait to see if the chancellor will lower VAT on any other environmentally friendly products.
With inflation down to 4.6%, the chancellor has said that he can make tax cuts, but will he do so now or will he hold back on tax giveaways until the Budget in March? I expect to see at least some tax cuts on 22 November, perhaps to inheritance tax and corporation tax.
Read the latest Autumn Statement 2023 commentary on the MHA website where we will be providing resources, advice and practical guidance on what any new tax measures mean for you and your business, to help you prepare for and manage their impact. Visit the MHA Autumn Statement 2023 hub.