Cautious welcome for Budget

The direct, data and digital marketing industries have given a cautious welcome to the Budget, with the inevitable winners and losers emerging.
On the plus side, the Chancellor revealed fresh measures that could help businesses build new data-centres, with George Osborne saying he would streamline the system for planning applications and introduce new fast-track planning for major infrastructure. These, sources suggest, could streamline the development of future data-centres.
And the IPA also sees positives. IPA finance director Alex Hunter said: “Agencies, being people-based businesses with a high proportion of young staff, welcome the easing of the personal tax burden at the junior end. From a company viewpoint, while the reduction in corporation tax rate helps, there is still the previously announced increase in National Insurance which remains a ‘tax on jobs’. And given the propensity of freelancers in our industry, the announcement that the administration of IR35 is administered is welcome.”
Hunter added: “My only concern is the emphasis on tightening ‘anti-avoidance’ will prove a Trojan horse for selective reinterpretation of accepted rules to the detriment of the ‘fairness’ that this Budget seeks to attain.”
The DMA welcomes the extra help for businesses, and director of public affairs Caroline Roberts said: “We particularly welcome the cut in corporation tax and the extra help for small businesses. And, our charity members will be pleased with the new gift aid rules.”
The DMA claims it is a reasonably encouraging Budget in a difficult economy and is cautiously optimistic that it is a step in the right direction. The easing of red tape for businesses and the three-year moratorium for small businesses, for example, can only be a good thing, it said.
Meanwhile, the major online retailers are breathing a sigh of relief after observers claimed that the clampdown on VAT would have minimal impact on mail order businesses operating from the Channel Islands.
The tax hole has seen the likes of Amazon, Tesco and Play.com shift warehouses to the islands in order to sell mail order DVDs and CDs to UK customers without charging VAT.
The move was designed to safeguard Guernsey’s flower producers, but Osborne told Parliament: “We’re going to tackle the exploitation of low value consignment relief that has left our high street music stores fighting a losing battle with warehouses in the Channel Islands.”
Yet the impact is likely to be miniscule as the value is only reduced from £18 per package to £15, with most DVDs and CDs now selling for less than that.

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