Budget: PwC responds to impact of Budget on Scotland
Susie Simpson, Head of Private Business, PwC Scotland, said:
“This was very much a ‘continuing survival’ Budget from Chancellor Rishi Sunak as he took extended yet more extraordinary measures to protect an economy being buffeted by the Covid-19 pandemic.
“For a beleaguered public, there were welcome freezes on beer, wine and spirits duty – along with fuel, while many will be hoping to take advantage of the reduced rate of VAT for the hospitality and tourism sector when lockdown ends.
“However, home buyers in Scotland will look enviously south of the border following the extension until June of the stamp duty holiday on house purchases in England and Northern Ireland extended until June, with no tax liability on sales of less than £500,000. With the Scottish Land and Buildings Transaction Tax holiday due to end this month, all eyes are on the Scottish Government, to see if it will follow suit.
“There was some careful and innovative thinking from Sunak in the form of a deferred corporation tax rise to 25% for the largest 10% of corporates from April 2023 but countered by a new, and potentially complex, marginal relief system to mitigate the impact on SMEs back to current rates in some cases. There is also a headline move to stimulate investment of companies’ hard earned cash in plant and machinery with a new generous relief where every £1 spent qualifies for a deduction of £1.30. It will be interesting to see what, if any, impact this has on the Scottish Government’s calls for further devolution of taxes, including corporation tax.”
“Following the announcement of freeports in England, we await the guidance on Scotland – with the Scottish Government acting in consultation with Westminster.
“The focus on regional spending as Sunak pursues his levelling up agenda did lead to increased support in the North East as the area navigates the energy transition, while the acceleration of Growth Deals in Ayrshire, Argyll and Bute, and Falkirk are to be welcomed.”