Autumn Statement: Enterprise Zone and RGF measures offer encouragement
MEASURES to boost enterprise and stimulate investment in the West Midlands were some of the more encouraging announcements from the Chancellor in his Autumn Statement.
Mike Dell, president of Black Country Chamber of Commerce said: “We are pleased to hear that capital allowance of 100% will be available to encourage manufacturing and other industries into the Black Country Enterprise Zones.
“It too is good news for businesses that the Government has taken the decision to inject a further £1bn over this Parliament into the Regional Growth Fund, it is imperative that businesses in the Black Country have access to this fund to help grow, invest in plant and machinery, invest in people and training and therefore boost the economy.”
Mike Steventon, senior partner of KPMG in Birmingham, said Mr Osborne had announced a series of broad incentives to make the UK a nation of entrepreneurs by removing key barriers to SME growth through easier access to debt, increased access to seed funding as well as relaxing employment law and health and safety burden.
“When you add to this the 100% capital allowance granted to certain Enterprise Zones, including the zone in the Black Country, plus the addition of a further £1bn to the Regional Growth Fund, these schemes are providing substantial incentives to drive sustainable job and wealth creation within the regional economies.”
Graeme Crawford, head of Ernst & Young’s Midlands tax practice, said the move to further incentivise Enterprise Zones was welcome
“In the case of six of the Enterprise Zones that have recently been identified, tax depreciation of 100% of the expenditure on plant and machinery will now be available rather than the normal rate of 18% or 8% in some cases,” he said.
“This enhancement is despite the fact that some commentators consider that Enterprise Zones only move investment from one locality to another one nearby. If the government is convinced that these Zones are a good idea they could have gone further. The last time they were introduced 30 years ago they included tax relief on the cost of buildings. We are still a long way from that sort of major incentive.”
Chris White, a director at CBRE and head of the development consultancy and regeneration team in Birmingham, said: “The granting of 100% capital allowances to a handful of Enterprise Zones, including the Black Country, will undoubtedly help inward investment. It’s been said that the incentives to businesses don’t come anywhere near matching those under the historic EZ framework, but this will help.”
Iain Wright, tax director at RSM Tenon in Birmingham, said the capital allowances announcement would boost the Black Country site, set to be the home of Jaguar Land Rover’s new £355m engine plant.
“Manufacturers who establish themselves in the Black Country Enterprise Zone will be entitled to 100% capital allowances against the cost of plant and machinery. For capital intensive businesses, this could be a very valuable cashflow benefit and should help attract businesses to relocate there,” he said.
Stuart Wallace, head of tax for PwC in the Midlands, said: “The Chancellor has opted for no surprises, with very little being revealed that hadn’t already been announced or anticipated. However, many SMEs in the region do stand to benefit from a number of proposals announced. Anything that encourages investment into growth companies will come as a welcome boost for businesses.”
