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23 Nov 2023 / Uncategorized

Unpicking this year’s Autumn Statement

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Autumn Statement 2023: A big announcement on tax but businesses still need our support

‘110 measures for growth’ was a bold statement from the Chancellor in this year’s Autumn Statement, and it’ll be tricky to scrutinise in full but there were some big announcements this time around. Not least of these was the move to make full expensing permanent, hailed as the single biggest business tax cut in modern British history, that will maximise business investment, increase productivity and boost GDP.

This is very welcome news; it gives tax relief to businesses investing in new equipment, and is predicted to stimulate £20bn of investment per year for the next ten years. There’s no doubt this measure will stimulate investment but the Chancellor was somewhat shortsighted in his suggestion that this would prevent the need for borrowing.

The truth, for many businesses, is that tax is not the only barrier to investment. Tax relief makes it more affordable, certainly, but the reality is there are still many businesses that simply don’t have the working capital to invest in growth. If the Chancellor wants businesses to grow, increase productivity and contribute to GDP, he must recognise that borrowing to invest is a viable business strategy.

We in the finance industry play an important role here. The announcement of the tax relief will have stirred confidence in the business community, and appetite for investment will grow. For those businesses that lack the working capital but have ambitious plans in the pipeline, the right financial support must be available and accessible. If we are open-for-business, accessible and supportive, business investment will increase and the Chancellor’s predictions will come to fruition. We are an integral piece of the puzzle.

Aside from tax relief, there were a host of other measures announced, which touched on the main issues facing businesses but that could perhaps go further to tracking these challenges. Skills investment was acknowledged with a pledge of £50m for pilot apprenticeships for key industries, but there is debate to be had on whether this will solve wider challenges around a skilled workforce; business rates discounts were announced for struggling industries but there was no suggestion of reform; and steps will be made to clamp down on late payment practices but, in my view, they neglect to provide a universal solution to the growing challenge of invoice late payment.

Backing British businesses, as the Chancellor has promised, is not just a matter of offering support but it is about listening to businesses’ challenges, understanding their ambitions and tailoring solutions that meet their needs. The Government will never be able to find a one-size-fits-all solution, but with inflation heading in the right direction and with steady growth in the economy, there is certainly some cause for positivity amongst businesses. As finance providers, we must be there to help them harness this optimism.

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