Chancellor George Osbourne’s second budget is a positive one and can only be good for small and medium sized businesses in Wales, according to a leading financial expert.
Anthony Lewis, a director of top Wrexham-based Chartered Accountants Coxeys, says it is clearly a budget for business growth and that can only be good for the economy of Wales.
He said: “Here in Wales we are dependent on small and medium sized enterprises and this budget can only help stimulate business. Naturally the reduction in fuel duty will grab many of the headlines but that it is only a small part of the overall package.
“However, the reduction of 1p a litre in fuel duty still came as a surprise and will make a big difference to business when it comes to transport costs as well as the man in the street.
“We have to remember fuel duty was due to rise by 5p a litre if the plans of the previous Government had been adhered to – so the announced reduction in fuel duty actually equates to a 6p swing in the cost of a litre of fuel.”
Small and medium sized businesses right across Wales will also benefit from the cut in corporation tax announced in the budget according to Anthony Lewis.
He said: “The Chancellor announced a 2% cut in corporation tax instead of the planned 1% cut. However, only big businesses will benefit from the 2% cut although small and medium sized enterprises will still be paying far less as they will be able to take advantage of the 1% cut in rates.
“Alongside that reduction in corporation tax, firms can now take advantage of a big improvement in research and development aid with tax credits available increasing to 200% and then 225%. This should really help stimulate innovation in Wales.
“To explain, let’s say a firm wants to invest £100,000 into researching a new product, the firm will now receive a £200,000 reduction on its taxable profits instead of the £175,000 it would currently receive. And next year that will rise to £225,000.”
“Business rates relief, which should have ended this autumn, has also been extended by a year to October 2012 and the government has also extended the apprenticeship scheme with an extra 40,000 places available.”
There could also be good news for Wales when it comes to Enterprise Zones according to Mr Lewis.
He said: “The Government has announced there are to be a total of 21 new Enterprise Zones. They have announced 11 already in England and say they will announce the remaining 10 in the summer following consultation with the Scottish Parliament and the Welsh Assembly Government along with Northern Ireland.
“Hopefully, some of the new Enterprise Zones will be in ales and, even better, here in North Wales. Enterprise Zones really help rejuvenate areas and encourage investment.
“They work by encouraging new business and the building of new factory units in the zones by offering big tax incentives to the developers and business relocating or setting up within the zones.
“Enterprise Zones are really good schemes that have been proven to work in the past. They really do stimulate growth and investment and can only help new businesses develop.”
