It’s all about you

We support you and your business at every stage with expert advice that delivers outstanding results.

We provide accounting, tax and business advice to individuals, family, and owner-managed businesses from across our offices in Leeds, Manchester, Newcastle and York.

This article appeared in The York Press on Thursday 22 April 2009

Budget Commentary

Adrian Widdowson, associate tax director at chartered accountants Garbutt & Elliott of York takes a regional view at the Chancellor’s bid to repair the country’s finances.

ROOM for manoeuvre for Chancellor Alistair Darling was difficult as he presented his second Budget in the most difficult economic environment the country has faced in some 60 years.

Here in York and North and East Yorkshire our key growth industries are in bioscience, IT, distribution and logistics, cultural and creative businesses, food and drink, and the professional and financial sector. What did the Budget hold for these industries?

The tax system has helped bioscience and technology companies through Research & Development Tax Credits since 2000. Bioscience and technology are also now to benefit from a new £750 million Strategic Investment Fund. Another welcome measure is new investment to increase broadband access.

However, other specific budget measures such as the car “scrappage” scheme are, at best, of questionable value to local business. Giving a subsidy of £2,000 to people trading in their old cars for new ones may only divert spending from other sectors. If your business is in anything other than selling new cars, then it is far from clear that this scheme is good news.

The £500 million boost to housing is one of the main budget headline-catchers. The stamp duty holiday on homes sold for up to £175,000 is to be extended for another three months. It will benefit sales of existing houses as much as construction of new ones. But extra funds for local authority house building should be of benefit to local construction firms.

North Yorkshire has a particular interest in the food and drink industry because of its large agricultural sector.

The budget did little if anything for farmers. From 2008 the system of giving allowances for farm improvements and buildings known as the Agricultural Buildings Allowance scheme is being phased out, signalling an increase in farmers’ tax bills. The transport industry’s main concern over recent years has been the level of fuel duties, yet there is now to be an above-inflation increase in fuel duties, starting with an increase of 2p per litre from September. Furthermore, hauliers will be concerned about how the Government’s adoption of “legally binding” greenhouse gas emissions limits will affect them.

Finally, is there any help here for the finance sector? The main proposal in this area seems to be a tighter system of regulation, which may or may not improve matters, given the track record of regulatory systems in the past. All in all, therefore, not many reasons for optimism. But at least that is no more or less than we expected.