Initial reaction: Corporation tax, fuel duty & FLS

Peter Spence
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(Source: Reuters)

Corporation Tax

James King, MD, Find Invest Grow (FIG) VC firm:

We knew that a decrease in corporation tax was on the agenda for the budget and of course, it’s a positive step. But there is room for the Government to think more creatively about tax cuts/reliefs to increase liquidity, especially in start-ups. For example, unclaimed tax relief investors receive from the EIS and SEIS initiatives could be passed on to the start-up receiving investment. Start-ups could offset investor’s relief against corporation tax over two years, as well as NIC or VAT. This approach would provide tax reliefs to those that really need it, while incentivising investors.

Fuel Duty

Miranda Schunke, spokesperson for Green Flag, said:

We welcome the government’s decision to cancel the planned increase in fuel duty. Household budgets are already being stretched to the limit with the spiralling cost of living. While the cost of motoring is a constant concern, it will be a relief to millions of motorists that there is some respite against the escalating financial burden of owning and running a car.

Funding for Lending

Mark Blackwell, managing director of xit2, property data specialists, comments:

Given the Government’s pledge to support borrowers, today’s 8% fall in gross mortgage lending will be a significant disappointment. A one percent uplift in gross mortgage lending from a year ago is a very poor performance given the external impetus lenders are able to access. Including non-banks in Funding for Lending could make the scheme more effective.

However, lenders can be applauded for some of their caution – a return to the recklessness of 2007 would be as much of a failure as a further collapse in lending levels. Quality of lending is as important as quantity. Proper property and credit risk management will be vital for a more sustainable model of lending in future.