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Budget Comment from Grant Thornton

Jim Rogers, practice leader for Grant Thornton UK LLP in the Thames Valley area, said: “Businesses will be breathing a sigh of relief. The emphasis was on creating a new post-Covid economy and with two significant tax hikes already imposed this year, there was at least no more bad news.

“In general terms, this administration is focused the creation of a high value, highly skilled economy and the Chancellor stressed again the quality of our universities. Thames Valley is definitely a key part of what it sees as the creation of a science and technology superpower.  The comprehensive tax measures we already have to encourage R&D have gone a little further – increasing R&D spending to £20bn a year by the end of this parliament in 2024 – but this is down from his previous commitment in March of £22bn per year.  This extra spending is in addition to a change in the R&D tax relief rules, which will be expanded to include cloud computing and data.”

“There are more public spending commitments than expected and it’s good to see measures to take back control of duty in areas like tonnage tax, air passenger duty and alcohol. There are bound to be questions about whether the measures to ease the supply chain crisis, particularly around road distribution, go far enough.  Extending the HGV levy for a further year until 2023, while freezing Vehicle Excise Duty for heavy goods vehicles does not sound like a game changer.

“The supply chain problems we have experienced are not temporary and we need a massive investment in skills to meet this challenge. We await the details of the 42% hike to £3.8 billion spending on skills – but it’s certainly the direction of travel business wants to see.”

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