‘Austerity to be the norm in the public sector for years to come’

Stuart Cottee, head of tax at Deloitte in Yorkshire, on the new corporate tax rate of 20 per cent, said: “Marginal relief for small companies has been abolished so that the UK will have just one headline rate for the first time in decades. The combined effect will cost the Exchequer around £800m by 2017/18.”
By The Newsroom
Published 21st Mar 2013, 08:45 BST

On small business funding, Stephen Hall, tax partner at Deloitte said: “SMEs, particularly in the early stages, looking for much needed assistance with raising finance should be aided by the extension to the SEIS. It will encourage investment into enterprises that may otherwise struggle for external funding.”

Stuart Cottee, head of tax at Deloitte in Yorkshire, on the 10 per cent rate for R&D relief and its impact on jobs and growth: “The new R&D expenditure credit scheme for large companies will provide support to a wide range of industries and is predicted to provide additional relief of £1.1bn to innovative companies over the next five years.”

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Ian Stewart, chief economist at Deloitte, said: “The most significant announcement was the Chancellor giving the incoming Governor of the Bank of England, Mark Carney, the green light to pursue more expansionary monetary policy ... and to play a bigger role in getting growth going.”

Stephen Hall, tax partner at Deloitte, said for individuals the theme was “fairness”: “Despite the already announced cut in the top rate of tax from 50p to 45p, the general thrust is that the rich will pay proportionately more taxes, and the poorer will pay less as the personal allowance increases to £10,000.”

Richard Davis, tax director at Deloitte Real Estate, said: “This package is a welcome boost to both the housebuilding industry and developing affordable housing providers as, by stimulating an increased level of demand certainty, it should allow housing supply to rise.”

On the extra £3bn for infrastructure, Deloitte said: “Today’s commitment needs to be backed up by action and delivery. If infrastructure is to be the silver bullet for economic recovery, we need to see shovels hitting the ground on projects that have a real impact in driving growth.”

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Of the Chancellor confirming that the public sector faces a tough Spending Review in June, it added: “The extra squeeze on a number of Government departments outlined by the Chancellor today increases the pressure on a public sector already facing immense challenges. Austerity is going to be the norm in the public sector for years to come.”

Related topics:DeloitteAusterityYorkshireSMEs