Wrightstyle gives verdict on 2014 Budget

In his speech today, the Chancellor said that the “economy was recovering faster than forecast” and that it was “a Budget for building a resilient economy.”

In presenting his fifth Budget, the Chancellor’s proposals follow a year of UK economic growth, with record numbers of new companies being formed. However, Wrightstyle believes that a better balance still has to be struck between personal and corporate taxation, and encouraging small businesses to succeed – the incubators for tomorrow’s jobs.

“The SME sector, according to government statistics, is the engine room for opportunity, growth and job creation,” said Tim Kempster, Wrightstyle’s managing director. “While we welcome additional support for the building sector to construct 200,000 new homes, and for infrastructure support, the Budget fails to address a number of other issues.” Wrightstyle also welcomes other announcements earlier this year for £1.1 billion in business rates relief, some £100 million in broadband vouchers to enable small companies to get online – and limited, but valuable, growth funding for 20,000 small businesses. The small business sector, heavily represented in the building supply chain, has seen an increasing number of companies saying that they want to create jobs in the coming months, according to the Federation of Small Businesses (FSB), with more companies indicating improved access to finance.

“I support changes on taxation on energy costs, and the freezing of fuel duty – which can impact disproportionately on small building companies, particularly those with high energy usage or in transportation,” said Tim Kempster. The firm also welcomed an announcement earlier this week on the Tax-Free Childcare scheme, with up to £2,000 per child being available per year from 2015. This, Wrightstyle believes, will help people back into work, across all sectors. “We should also support the Chancellor’s announcements on lowering corporation tax, to provide £ one half billion to small house builders, and the additional help offered in export finance – measures that will encourage the construction sector at a micro level, and also encourage companies to look both at investment and at export markets,” said Tim Kempster.

This is a strategy that Wrightstyle has pursued over several years, with its business balanced between domestic and international markets – exporting to the USA, South Africa, and MENA and APAC regions. It has allowed the company to develop specialist systems to mitigate against fire, ballistic and bomb attack, while not becoming dependant on any one market.

However, a particular bugbear in the building sector, are retentions and late payments. This must be addressed, believes Tim Kempster, perhaps through the Prompt Payment Code - with figures suggesting that UK companies owe suppliers over £50 billion. “An EU late payment directive is already in place, which sets a 30-day deadline, with slow payers facing tougher tax penalties and SMEs having easier redress,” he believes. “In addition, we also all want to see the building sector take on more staff and create sustainable employment, but future decisions on the National Minimum Wage (NME) must take into account financial constraints in the sector. “At present, companies only receive six months notice of NME changes, which makes it very difficult for us to plan ahead with confidence and take on new people,” he said.

Ends

Jane Embury, Wrightstyle, +44 (0) 1380 722 239 jane.embury@wrightstyle.co.uk

Charlie Laidlaw, David Gray PR, +44 (0) 1620 844736 (m) +44 (0) 7890 396518 Charlie.laidlaw@yahoo.co.uk