BUSINESS REACTION:HIGH EARNERS in the North and cross-Border shoppers from the South are likely to be among those who will benefit least from the UK budget, according to its critics.
British chancellor Alastair Darling intends to increase the higher tax rate to 50 per cent. This will affect those earning above £150,000 (€167,000) from next April.
Chairwoman of the Institute of Directors in Northern Ireland Joanne Stuart said the tax rise was little more than a “headline grabbing” measure. “Its impact on raising money, either here or in the rest of the UK, is minimal,” she said.
The institute chief reflected a less than enthusiastic response from business leaders in the North with Mr Darling’s second UK budget which has also raised taxes on alcohol, cigarettes and fuel.
“The growth in public spending will have to slow significantly over the next few years, and Northern Ireland, with its higher dependence on the public purse, will bear a disproportionate burden as a result,” Ms Stuart said.
Together with other business leaders, the institute chief has welcomed the decision to double the first-year capital allowance rate form companies to 40 per cent.
Mr Darling’s plans to deliver more support for loss-making companies through tax rebates have also been welcomed.
But according to Nigel Smyth, Northern Ireland director of the Confederation of British Industry, there was little good news for business in the North. “There are a number of welcome micro-measures which should help to stimulate investment and support struggling businesses. Increased investment allowances, a top-up trade credit insurance scheme, a time-limited scrappage scheme for cars, a range of low-carbon initiatives and some support for housing will be welcomed by the business community, especially considering the chancellor’s tight fiscal constraints,” he said.
The Northern Ireland Independent Retail Trade Association also criticised the budget for failing to help small businesses who are struggling.
Glyn Roberts, chief executive of the association, said the only good news was that the chancellor “did not make the mistake” of increasing direct taxation on businesses. “During this challenging economic climate, we would have liked to have seen targets designed specifically . . . to encourage businesses to take on more staff.”
