The 2024 Budget brings significant changes, focusing on substantial tax increases and regional investments.
- £40bn tax rise marks the largest increase in a generation, gaining rare approval from the International Monetary Fund.
- Creative UK appreciates the ongoing investment in creative industries and regional projects in North-East England.
- There is support for Enterprise Investment Scheme and Venture Capital Trusts, vital for high-growth businesses.
- The focus is on long-term economic growth through public investments in technology and infrastructure.
The 2024 Budget, marked by a £40bn increase in taxes, represents the largest fiscal adjustment seen in recent times. This unconventional approval from the International Monetary Fund underscores a commitment to fiscal sustainability, a theme strongly resonated throughout the announcements.
Caroline Norbury, representing Creative UK, highlighted the strategic direction of the UK Government towards developing industrial strategy and fostering investment. Her acknowledgment of the investment in the North-East’s Crown Works studio and the continuation of fiscal incentives for VFX reflects a commitment to nurturing growth in cultural sectors. The government’s focus on publishing a sector plan for the cultural and creative industries is a welcome initiative, promising to unlock the potential contributions of these industries to the economy.
Sam McArthur from Praetura Investments expressed optimism regarding the budgets’ support for EIS and VCTs, emphasising their importance for investors and innovative businesses. The budget’s commitment to regional economic growth, particularly in northern cities, could significantly empower local economies, supporting Praetura and its focus on opportunities in Northern England.
Paul Bainsfair of the IPA raised concerns over changes to Employer National Insurance contributions. The increase represents a substantial financial challenge for agencies that are already key drivers of economic growth. There are apprehensions regarding the potential negative impact of increased CGT on investment appetite in agency businesses.
Jeff Watkins from CreateFuture noted the budget’s focus on technology, particularly the opportunities presented by the Chancellor’s productivity targets for government departments. The maintenance of R&D funding and initiatives like ‘Skills England’ are seen as positive steps towards addressing skills shortages within the tech sector.
The Mayor of Greater Manchester, Andy Burnham, welcomed the Budget’s commitment to addressing housing issues and the new devolution funding framework. These measures represent significant opportunities to advance local economic growth and social improvements.
Mike Parkes of GoSimpleTax referred to the budget as mixed for the self-employed, citing unchanged rates for income tax and National Insurance as positive but unclear timelines for Making Tax Digital as a concern. Adjustments in Employer National Insurance could also financially impact contractors, highlighting the nuanced effects of the budget on the self-employed community.
Additionally, Rhys Merrett from The PHA Group reflected on the ambitious policy announcements, cautioning that while aims are high, delivery will be critical. Increased CGT could burden tech startups and affect the UK’s standing as a tech hub, underlining the careful balance needed between reform and maintaining competitiveness.
The 2024 Budget seeks to balance significant tax increases with strategic investments to foster long-term economic growth.
