Colliers International commercial property experts Tim Davies (Industrial and Logistics) Peter Brunt (Hotels) Simon Wells (Hotels) Christopher Dawson (Development Consultancy) James Edwards (Heritage and Planning) and James Preece (national offices) put their heads together to come up with a shortlist of ideas for the Chancellor to consider before issuing his Autumn Statement.
TD: The Government should offer tax breaks to manufacturers for capital investment. This would help to reverse the trend of manufacturers locating abroad and see even more returning to the UK.
PB: I believe the UK should mirror Europe and support the hospitality sector by reducing VAT to match those on the Continent, which can be as low as 5 per cent instead of the 20 per cent here. Deloitte forecasted that tourism will be worth around £127 billion this year (2013), equivalent to 9 per cent of the UK’s GDP. It supports over 3.1 million jobs, that’s 9.6 per cent of all jobs and 173,000 more than in 2010. VAT relief for hospitality businesses would provide a real tonic for a sector beginning to pull away from the downturn and which is an undervalued but key element of the UK’s climb out of recession.
SW: I would also like to see the Chancellor scrap VAT below the Threshold for those small businesses who wish to trade above it. The small business threshold for VAT is a turnover of £74,000, really quite modest. Above that a business pays VAT not just on the extra turnover but on all the turnover so there is little incentive to take say an extra £10,000 as the VAT on £74,000 is about £8,000 (on the fixed rate VAT scheme). To stand still a trader needs to take an extra £30/40,000, often not achievable, so they simply under perform. Free up small business to grow, they’ll end up paying more income tax anyway.
CD: I believe the Chancellor should look at development costs. These are a significant barrier to development, not just in terms of the financial burden for the developer and the local authority to process, but also for the time required to produce them there by extending the planning process and delaying schemes. Much of it is associated with environmental requirements, but more funding for local authorities to process applications and encouragement particularly on smaller brown field sites will see more progress. Banks won’t support a development until it has planning permission which means a developer needs cash not just to buy the site but to hold it whilst planning takes place and to be able to fund the application, all of which is fraught with uncertainty as there are no guarantees.
JE: It would be good to see more public spending on infrastructure whether transport etc, not only directly creating jobs but indirectly supporting many more tertiary support industries. Importantly this should pump prime the economy and stimulate growth throughout the country. Construction is a driver for growth, HS2 is stealing all the headlines, but there is much more going on that needs to be push on a local level that will help local economies.
JP: I think the Chancellor should allow business rates to be revalued in 2015 rather than until 2017 or at the very least freeze them during the time the revaluation is postponed.
