MINI BUDGET: BUSINESSES WINS BUT WITHOUT GROWTH CRITICISM

The cancellation of the Corporation Tax is welcome by businesses to increase investment but have put some doubts into the overall economic growth.

The Chancellor’s mini budget has bought some positivity within the business sector and in a feedback discussion after the announcement the members of ICAEW welcomed the scrapping of the N.I. increase to 25% Corporate Tax.

There has been some doubt in the effectiveness of economic growth and some concerns on the seeming lack of stability within the party swinging wildly on the economic policy.

A CFO in the travel sector said: the typical customer is not in the higher tax bracket thus removing the 45% additional rate of income tax was not seen as much benefit.

The effect on the exchange rate will be dramatic because of this mini budget. It could potentially make the UK more attractive for investors investing into the country but could result in importing inflation.

Despite the benefits this could provide, some businesses saw this as a gamble and believe this will help with survival rather than growth.

A London based CFO asked:

Seeing the pound fall to a 37year low and the cost of borrowing increases, some have questioned whether we can afford to take these risks, and how does this balance the books with increasing interest rates and debt?