Business leaders have broadly welcomed yesterday’s Budget as one that will boost investment, exports and regional development and skills, with help for manufacturers high on the Chancellor’s agenda.
Mr Osborne cut manufacturers’ bills through a series of measures the Treasury estimates will save around £7bn across the economy in lower energy costs by 2018-19.
One of these was to freeze the carbon price floor, which is a tax on electricity generated from fossil fuels, for the rest of the decade, which could save a mid-sized manufacturer almost £50,000 on its annual energy bill.
Another was the extension of a compensation scheme for energy-intensive industries, such as steel and chemicals, until 2018 and gave them extra help worth almost £1bn to protect them from the cost of other green levies.
Meanwhile, as far as investment is concerned, the Chancellor announced that the annual investment allowance, for the “99.8 per cent” of British companies that are eligible for 100 per cent of it, has been extended from £250,000 to £500,000 until the end of 2015, with immediate effect.
In addition, Mr Osborne confirmed that the Seed Enterprise Investment Scheme (SEIS) and the Capital Gains Tax (CGT) 50 per cent reinvestment initiative would now become permanent.
Research and development (R&D) relief for loss-making companies has also been extended from 11 per cent to 14.5 per cent from April this year, while the rate of income tax relief for social enterprises has been set at 30 per cent, bringing it in line with the Enterprise Investment Scheme (EIS).
However, Mr Osborne warned that the Government was also planning to investigate the misuse of Venture Capital Trusts (VCT’s) and EIS in a bid to “better target high-risk investment” and “avoid subsidising low-risk activities that already benefit from certain government programmes”.
