The Spring budget brought a few surprises, some welcomed, and indeed, some less so. Particularly, for the family business sector the Chancellor’s announcement to more than half the Dividend Tax-Free Allowance will bring disappointment and concerns on impacts for growth and investment. The IFB suggests that this ‘added expense risks destabilising long term shareholding in family-owned firms’. It has called on the Chancellor for this to be reversed as it believes it will ‘disproportionately impact family run businesses’ and comes so soon after an increase in Dividend tax for higher earners introduced in 2015.
The focus on addressing the skills gap in the UK was welcomed by many, including the Confederation of Business Industry, as vital for long term business sustainability, particularly after Brexit.
Despite concerns about business rates relief from smaller to medium sized family businesses, the Chancellor appeared to offer good news on this front, with nearly half a billion pounds promised to help those facing major hikes in rates.
However, there are warnings that this does not get to the nub of the problem. Adam Marshall, director general of the British Chambers of Commerce criticised the government for sending “mixed signals”. He says that while being welcome, “measures that mitigate the short-term impact of business rate rises are little more than a sticking plaster”. It requires ‘radical changes’ to fix a broken rates system, he believes.