Budget calls to Jeremy Hunt from Tier One, Active and Populus

The Budget comes in the wake of the autumn statement last November, which saw the Chancellor hike taxes as he and Rishi Sunak sought to restore UK financial credibility after Liz Truss’ short-lived premiership.

This time, the Chancellor is expected to focus on measures that will get various cohorts back to work as part of a wider push to boost growth.

Paul Blight, Head of Wealth Management at Newcastle-based Tier One Capital, said: “The chancellor is in the fortunate position of having more room for manoeuvre at this budget than he had thought likely.

"There is around £30 billion more to spend than he thought. This offers an opportunity. But making the most of it will require a delicate balance between appeasing factions of his own MPs and acting in the national interest.

“Those who had supported Liz Truss will hope that he is able to follow through on tax cuts that can help their core affluent voter base in the South of England. Yet when inflation is running hot more tax cuts threaten to exacerbate that problem and will not get support to those struggling the most.

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"His other option is to use the headroom to settle public sector pay disputes and provide financial support to families which can genuinely grow the supply-side of the economy. For example, adding significant support with childcare costs for under twos could enable many parents to return to the workplace early, alleviating the labour shortages which are holding back British business.”

Karl Pemberton, managing director of Teesside-based Active Chartered Financial Planners, said: “I’ve seen several predictions for this week’s budget that are largely positive, including some continued help towards energy bills, a possible further freeze to fuel duty, and removing the cap on doctors pensions to ease the strain on the NHS.

Karl Pemberton (Image: Press release)

“However, the proposal I certainly hope doesn’t make it out of the red dispatch box is the potential rise in corporation tax. The feedback I’ve heard suggests that it will discourage businesses from investing and recruiting to try and counter the effects. I think it’s a bit of an own goal, and Mr Hunt would gain more from encouraging businesses rather than punishing them.”

Sim Hall, managing director of Darlington-headquartered STEM specialist recruitment firm Populus Select, said: “If the government truly wants to make the UK a ‘Science Superhouse’ as it says, then it needs to use this budget to set out its stall. If we are to compete globally for investment and innovation, we urgently need to do more to attract big players.

“I work with science and engineering firms across the world and my clients tell me that other countries are doing a lot more than the UK to attract cutting edge firms, with the EU and US introducing huge subsidies.

“Changes to corporation tax should be scrapped. At the very least, the blow could be softened with a continuation of the super deduction scheme and further support on research and development spending. That would go a long way, but alone may not be enough to put the UK at the forefront of an increasingly competitive playing field.”

Lee Watson (Image: Press release)

Lee Watson, tax partner at Clive Owen LLP, which has offices in Darlington, Durham, Middlesbrough, and York, said: “From an income tax perspective, we are not anticipating movement in terms of rates and allowances. However, the chancellor needs to incentivise those retiring early to remain or return to the workplace. Could he achieve this by giving a further allowance to individuals to use against their pension income, if they also have income from employment? In addition, there are suggestions that the amounts that can be saved into pension and receive tax relief, could be increased.

“Overall, we are not expecting a significant give away but with an election in 2024, the chancellor needs to set a tone of positivity to the electorate.”

Gavin Cordwell-Smith, chief executive of Hellens Group, which incorporates several property, construction, manufacturing and social enterprise businesses with interests across the North East and Yorkshire, said: “We were fortunate to benefit from the government’s super-deduction capital allowance when investing in our facility in Catterick.

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“I both hope and expect that an extension of this programme, which accelerates investment and delivers productivity, will be announced in some form. However, because of the anticipated hike in corporation tax, in order to continue to incentivise investment the 130% deduction will need to be retained.”

Bob Borthwick, a director with Teesside recycling experts Scott Bros., said he is largely looking for inaction from the chancellor - by not abolishing super deduction relief tax, maintaining the status quo on fuel duty, and ignoring the pledge to increase corporation tax from 19% to 25%.

He said: “Without super deduction relief, which rewards investment in plant and machinery, Scott Bros. would have been forced to limit the scope of its plans and in turn its future growth strategy. In addition, any rise in fuel duty, coupled with an expected increase in corporation tax will have a detrimental impact on SMEs across the country – reducing the amount of cash available to invest and innovate, reigning in ambition, limiting the rewards while at the same time extending the risks.”