The latest Budget from the chancellor Rishi Sunak was sprinkled with a range of welcome measures including a national infrastructure bank, ongoing covid-19 support and a fund to drive the use of Modern Methods of Construction. However, the reality of increasing taxation, despite a super deduction policy, was laid out with changes to corporation tax and freezing other allowances.
From 2023, corporation tax will jump from 19% to 25%. There will be exemptions for small businesses whose profit of £50,000 or less will continue to be taxed at 19 per cent. A tapered rate will be introduced for profit above £50,000, meaning that only those with profit of £250,000 or greater will be taxed at the full 25%.
UK Infrastructure Bank will have £12bn of equity and debt capital to finance local authority and private sector infrastructure projects across the UK. It will also be able to issue up to £10bn of guarantees and as a result support at least £40bn of both private and public sector infrastructure projects across the UK.
The chancellor confirmed a taskforce to drive housebuilding using modern methods of construction with £10m of funding. The new unit will be based in the Housing Ministry’s new office in Wolverhampton and will work closely with local authorities and metro mayors.
The government also confirmed more support to employers in England who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 under the previous scheme. The government also announced the introduction of a £7m fund from July 2021 to help employers in England set up portable apprenticeships and help people who need to work across multiple projects with different employers.
Graham Harle, Gleeds chief executive, said: “The Budget means that business will be paying more tax. Whilst understandable, it is counter-intuitive for our sector since, for every for £1 spent on construction, £3 is created in the wider economy.
“I had also hoped we’d see a Budget which helped the UK reach its net zero targets, prioritising a fully funded retrofitting programme and enhanced investment in building safety remediation works, all of which creates jobs – a stated priority for the Chancellor.
“However, confirmation of the national infra bank was good news and I do welcome increased incentive payments for apprenticeships, the extension of the stamp duty holiday and the super-deduction on specific capital items against tax was imaginative. It was a highly politicised budget with an eye on the next election as much as a post Covid recovery plan.”
Ben Hancock, managing director, Oscar Acoustics, said: “The Government’s ‘Help to Grow’ initiative is a welcome response to the all-so-common skills shortage which is prevalent in the industry. We know from experience that there’s a healthy appetite amongst employees for further training.”
Iain McIlwee, FIS chief executive, said: “The doubling of incentives to support businesses taking on apprenticeships is welcome, but it does not fully reflect the value that business delivers through apprentice schemes. It would have been good to hear this go further and guarantee that the Apprenticeship Levy is ringfenced and adapted to support further investment in the infrastructure needed to deliver quality apprenticeships.