Scottish businesses to ‘breathe sigh of relief’ after UK Budget

Andrew Howie

Andrew Howie, managing partner for Grant Thornton UK LLP in Scotland, said businesses “will breathe a sigh of relief” after being spared tax rises.

“As this is the closest we have come to a post-pandemic Budget, it’s striking how different the Rishi Sunak approach is from the Conservative chancellors of the recent past,” Mr Howie added.

“There’s a broad spectrum of spending and the extra £4.6 billion under the Barnett formula per year will help Scotland recover from the pandemic.

“The changes announced to business rates will be a welcome relief to many firms and should give them greater confidence to invest and grow while also embracing sustainable energy choices.

“Operators in the retail, hospitality and leisure sectors, who were among the worst hit by the pandemic, will benefit from the temporary 50% cut, offering them some extra breathing space to find their way out of debt and invest in the future of their staff and buildings.”

Vishal Chopra

Vishal Chopra, head of tax for Scotland at KPMG in the UK, said businesses are “likely to be relieved that it was a relatively quiet budget for them with few new tax obligations”.

He continued: “Rishi Sunak’s budget focused on regional rebalancing including a number of funding announcements for Scotland, with the government keen to provide a foundation for growth and economic rebalancing.

“While we hope the Levelling Up White Paper will bring further focus to the government’s efforts to rebalance the UK economy, it’s pleasing to see that the government is wasting no time in addressing what the Chancellor referred to as the UK’s ‘uneven geography’.”

Mr Chopra added: “Scotland’s food and drink sector will be feeling hopeful with measures designed to provide duty relief for low alcohol content producers such as cider and other low ABV drinks, cancelling the planned increase on duties for spirits including whisky, and introducing a new ‘draught relief’ to support pubs.

“Certain sectors will be feeling more optimistic about the future than they have for some time, including those dependent on domestic flights where changes to air passenger duty have been announced. It remains to be seen how this will interact with Scotland’s proposed air departure tax.

“The creative industries will also be thankful for extensions and reforms to tax reliefs which will affect the likes of museums, galleries, and theatres.

“Almost as significant was the absence of comment on certain areas, with relatively little on the environment ahead of COP26, or addressing how we tax wealth and the way we work.”