Tomorrow (March 6, 2024), the Chancellor of the Exchequer Jeremy Hunt will reveal the Spring Budget. Will there be tax cuts? Will ISAs be expanded? Will the inheritance tax go away? We will know soon enough. As there is an election looming, you can expect some programs to be targeted at garnering votes to help keep the Tories in control.
Yesterday, SkyNews reported that the Chancellor may be leaning towards a tax reduction as low-tax economies tend to grow faster and are more entrepreneurial. At the same time, Hunt said any reduction would need to be done in a “responsible way,” and they would not cut taxes by borrowing.
So what are Fintechs hoping for? CI received several comments from Fintech Insiders.
Paul Harrald, CFO of Curve and member of the Unicorn Council for UK Fintech says that given the current gloomy economic environment, they hope the budget will not overlook “initiatives promoting financial literacy and inclusion.”
“We believe that everyone should have access to and understand the financial tools necessary for their well-being. Policies that support education and accessibility in financial services can help bridge the gap between technology and users,” said Harrald. He added that they believe enhanced R&D tax credits are vital for boosting innovation in financial services. They hope the budget will introduce more provisions for firms investing in research and development.
“The introduction of policies that facilitate access to capital for startups and growth-stage companies would also be a significant boost to the sector. This includes not only direct financial incentives but also regulatory reforms that encourage investment in the Fintech sector,” stated Harrald. “By creating a more conducive environment for venture capital investment, the government can stimulate job creation, drive economic growth, and enhance the UK’s competitiveness on the international stage.”
Harrald said the above measures would not only help Curve but would also “bolster the UK’s position as a global leader in fintech innovation.”
Sinéad McHale, CEO of Satago – an SME focused Fintech, suggested some policies that would support smaller firms while helping to battle the Labour party.
“Election polls show the majority of UK SMEs are currently leaning towards a Labour government. The Chancellor’s Spring Budget this year is a huge opportunity to reengage with SMEs and offer practical measures that can alleviate some of the risks they face in doing business. While (minimal) cuts to income tax or National Insurance are expected in order to help appease consumer voters ahead of the election, SMEs will be looking for specific measures to support small business growth, said McHale.
She said that raising the Employment Allowance in line with the National Living Wage to cut taxes on jobs while raising the £85,000 VAT threshold could help ease costs for SMEs and avoid them missing out on revenue.
“Tougher penalties for late payments, and extended legislation in this area can also help boost cashflow – a lifeline for SMEs who too often feel forced into unsustainable borrowing habits,” she added.
McHale noted that SMEs are the backbone of the UK economy creating jobs whileboosting revenue. At the same time the current economy is harming these firms from achieving their full potential.
“Late payments, tight cashflow, and poor access to working capital are still the big issues stopping SMEs from being able to invest in their growth – and all too often, creating bad debts. With over £32 billion in unpaid invoices still plaguing the UK, SMEs need more than reassurance from the government right now – they need policy action,” McHale declared.
How much do you really know about the Budget?
Ahead of tomorrow’s speech we explain the history of the Budget, how it works, and how it affects you 👇https://t.co/2ukepuokVg
— HM Treasury (@hmtreasury) March 5, 2024