Businesses feel the pinch after Budget changes
Small businesses in Shropshire came away from Chancellor Philip Hammond's budget feeling under-pressure, it was claimed today.
A combination of factors, including changes to dividends paid to shareholder directors and an increase in National Insurance contributions to the self-employed, will sting many of the small businesses owners whose companies constitute the large majority of businesses in Shropshire.
Stuart Rea, head of corporate at law firm FBC Manby Bowdler in Shropshire, said "The Chancellor was keen to stress that the Government was listening to the voice of business – but I’m not sure many of our region's small businesses will feel they have been heard today.
"On one hand, the Government wishes to encourage enterprise yet today’s National Insurance contribution changes could discourage those wanting to start their own business.
"And the drop in dividend tax allowance for director shareholders will affect thousands of SMEs across Shropshire."
Keith Winter, an accountant with Dyke Yaxley and a former president of Shropshire Chamber of Commerce, added: "With putting the business rates up, dividend figures going down, and self-employed national insurance contributions going up, it's going to have a negative effect on small businesses in Shropshire."
He said the increase to the minimum wage would also affect businesses, combining with other issues to chisel away at profits, which would not be balanced out by a drop in Corporation Tax.
"It's difficult to put a figure on its, but I think it could be anywhere between £5,000 or £6,000 off their bottom line," he added.
"Most of the businesses in Shropshire are smaller businesses, and I think the overall impact is that Mr Hammond has done them no favours."
Ray Hickinbottom, chairman of the Federation of Small Businesses in Shropshire, echoed the concerns.
His group held a Budget event, at which heard from accountants, university experts, and representatives from inward investment group Enterprise Telford.
He said: "From a small business point of view it's very much into negative territory.
"I don't think it's the case that these changes will necessarily drag businesses under. They will have to work harder, and it will make a lot of them think twice about investing and employing more people.
"The other big one for us is business rates. The Chancellor announced the £1,000 discount for pubs, but it won't be the difference for them, and business rates take no account of their ability to pay."
James Wright, managing director of UK boiler manufacturer Mistral Boilers, said there was little real support for the manufacturing sector, especially those looking to take advantage of new and emerging markets overseas post-Brexit.
“We have already developed new markets outside of the EU for our products, but we were hoping for at least some further insight into what the Government’s long-term strategy was for business in a post-Brexit era."
