4 August 2015

  |  CBI Scotland

News

Double-edged Budget for business

Businesses in Scotland will be waiting for details on announcements made by the Chancellor in this summer's Budget. 

Double-edged Budget for business

The Chancellor’s first Budget of the new Parliament unveiled a welcome focus on productivity and contained many measures which the CBI has called for, including a permanent extension of the Annual Investment Allowance which will support investment by small and medium-sized firms and the pledge to set out a Business Tax Roadmap by April 2016.

We also saw some unexpected steps such as the further reductions in Corporation Tax to 18% by 2020 which will give the UK the lowest rate in the G20. However, policy interventions such as the National Living Wage and the Apprenticeships Levy will require careful thought and thorough consultation.

In particular, Scottish firms will want clarity both on how the Apprenticeship Levy will apply to them and how the proceeds will be used in Scotland. The UK-wide levy will apply to large firms (+250 employees) to fund the government’s target of 3 million new apprenticeships with introduction expected in 2017-18. As skills development and apprenticeship programmes are run at a devolved level, on the face of it this would not be straight-forward when applied to companies operating in Scotland, so more detail is necessary through full consultation.

The CBI has always been clear that boosting productivity growth is the only sure-fire way to boost living standards, and we will be engaging with the UK Government on the many strands of its ‘Productivity Plan’ to help make stronger productivity a reality.

The CBI is working on a range of position papers covering aspects of the UK business tax system, putting forward recommendations for what businesses want to see from the roadmap in April 2016. If you want to contribute to this work, please get in touch with Rob Fontana-Reval, Head of Tax & Fiscal Policy - Rob.FontanaReval@cbi.org.uk