Robinson Reed Layton, a leading firm of accountants based in Truro, today delivered their take on the Emergency Budget to an audience of clients and business friends at a Breakfast at Truro College, and again at a Lunch at the Cliffhead Hotel in Carlyon Bay.
Guests discussed the affects of the announcements on their own businesses, before a briefing from Robinson Reed Layton on the key issues.
Paul Reed, the Senior Partner of Robinson Reed Layton, spoke of the likely effects of the Budget on the Cornish economy, saying “the significant cuts in public sector spending will be alleviated for Cornwall by the proposed Regional Growth Fund, and by the exemptions from employer’s NIC for new businesses set up after today. I also welcome the replacement of the SW Development Agency by a new Enterprise Partnership for Devon and Cornwall. I hope this will result in more decisions about local development being taken locally”.
James Bailey, Tax Partner at Robinson Reed Layton, reviewed the effects of the overnight increase in the rate of capital gains tax and other tax increases, as well as speculating about the likely tax changes in the next few years.
James said, “Although some of our clients will be hit hard by the increases in income tax and CGT, there appear to be some opportunities as well, and we must all breathe a sigh of relief that the tax reliefs for Furnished Holiday Accommodation are not to be abolished after all.”
Stephen Gainey, Partner specialising in VAT at Robinson Reed Layton explained how the increase in VAT to 20% next January will work, saying: “At least 4 January, being the first working day of 2011, is a more logical date than the previous change which took place on New Year’s Eve!”
Graham Boulton, Partner who deals with the firm’s many charitable sector clients at Robinson Reed Layton, spoke of the many pressures that charities would be under in the current economic climate, and the likely impact of the measures announced in the Budget.
Over 150 guests attended across the day from businesses and organisations throughout the region. Many had questions and initial reactions to the Budget and were happy to share these:
Carleen Kelemen, Director of the Convergence Programme and Vice Chair of the Institute of Directors for Devon and Cornwall commented: “The Chancellor did what he set out to do and that was to strike a balance between preserving the opportunity for growth for businesses (especially small businesses) whilst taking dramatic action in addressing the deficit. It is a welcome fact that businesses can now plan ahead for the next four to five years and that the market’s initial reaction has been positive. We still have to wait to see the details of the promised public sector cuts and how they will impact in both the public and private sectors in the autumn of this year”.
Kathryn Worlock from Follett Stock solicitors commented, “There was not much announced in yesterday’s budget that was unexpected. Cuts will be tough but we knew it would be the case. Cutting Corporation Tax will help small businesses and is positive for the local economy – it will really help our small business clients.”
Whilst Richard Orsman from Deveron Metals said, “The Budget didn’t go far enough. We expected the VAT rise and Corporation Tax which will affect a lot of people, but in terms of government cut backs there should have been more. We need more culling in the public sector.”
Kurt Sigrist from Rodda’s added, “Perhaps it is a start. As private businesses we are already as lean as we can be”.
Gail Hunt, local businesswoman with both residential and holiday lets welcomed that tax reliefs for Furnished Holiday Accommodation are not to be abolished after all saying, “I am delighted about the ruling on Furnished Holiday lets as it will affect the whole of the South West. The fact that holiday lets will get a reprieve will make a huge difference to me.”
David Wright from Young People Cornwall commented, “The charity sector has already seen severe cuts, so the announcements yesterday haven’t affected us too much. Pre budget changes affected us more and emphasise that charities need to be run as business-like as possible. I am worried about the increase in VAT and I’m here to find out more about Corporation Tax from Robinson Reed Layton”.
Paul Turner from Cornwall Care added, “The biggest impact for us in the VAT and also the general public sector cuts as half of our work is from the public sector.”
Francois Nieuwoudt from Equilibrium Heath and Skincare said, “I’m looking forward to hearing more from Robinson Reed Layton as the sorts of things I have picked up so far look good in terms of stabilising the economy so I think will be beneficial for us in the long term.”
Nathan Andrew and Malcolm Reynolds from SJ Andrew and Sons also wanted to find out more from Robinson Reed Layton as they had been unable to watch the announcements yesterday. Nathan said, “I haven’t been able to watch much about the budget yet so I don’t know the details. I’m here to find out more. I know about the VAT increase but we deal mainly with trade, so hopefully it won’t affect us too much.”
Richard Gilbert from Miller Commercial commented, “The VAT increase is going to have the effect of slowing down sales, however it is a good way for the Chancellor to raise money. It makes sense but it will slow down sales when retailers are already struggling.”
Mark Bailey and Suzanne Thompson from Conway Bailey were looking forward to hearing more from Robinson Reed Layton. Suzanne said, “I’m not sure yet how it will impact. My biggest fear is the VAT on fuel which will cost us a great deal of money – as much as 2.5p on every litre. On the other hand, they have upped the earners National Insurance threshold which is a plus.”
Fred Teagle from Teagle Machinery said, “I am disappointed about the capital allowances being reduced but encouraged by moves to employ and take on staff. It’s important to keep an industry in Cornwall which is producing wealth.”
Robinson Reed Layton historically hold a Budget Briefing the day after the Budget is announced, in response to the impact it will have on businesses and people across the region. This year’s briefings took place at 7.30am on Wednesday 23rd June in Truro, followed by 12.30pm in St Austell.
Various issues were addressed including the impact for charities, Cornwall’s perspective on the Regional Growth Fund and the move of the RDA to a Local Enterprise Partnership, the New Business Scheme, Furnished Holiday Lettings, National Insurance rates and limits, Child Tax Credits, VAT, Entrepreneurs Relief, Capital Allowances, Corporation Tax and Anti Avoidance rules – plus more!
Places at the briefings were free in order to reach as many people as possible, with an opportunity to donate to Cornwall Hospice Care instead.
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