Member Article

Pre-Budget comments from Mark Sismey-Durrant

Ahead of the Chancellor’s 2016 Budget, Mark Sismey-Durrant, Chief Executive Officer at Hampshire Trust Bank, urges the Government to review the new stamp duty rules and reform business rates.

“2016 is a melting pot of political and economic uncertainty. The threat of Brexit combined with home-grown regulatory changes means that businesses and consumers may be tempted to batten down the hatches and choose not to invest in future growth.

“Our business savings research found the country’s SMEs are already building up their cash reserves, driven by the perceived need for greater ‘cash buffers’ and concerns about the volatility of the economy. We need to build much greater business confidence if the country is to succeed and therefore the Chancellor needs to be cautious about introducing too much taxation as it will cause uncertainty and for the economy to slow down. Instead the Chancellor needs to spend his way through the next period – as recommended by the OECD - to install confidence in both companies and consumers and do everything in his power to create a period of steady economic growth for the year ahead.”

Stamp duty review

“We urge the Chancellor to review the new stamp duty rules. We understand that the Government wants to increase housing supply but we do not believe that increasing stamp duty will have the desired effect. These changes will not only impact on buy-to-let investors and second home owners, there will be unforeseen complications for those trying to move jobs from one area to another who may not be able to sell their homes straight away. Those with buy to let investments may decide not to sell, as they will increase the costs of buying back into the market in the future. The risk with this interventionist approach is that the costs simply get passed on to the tenants and it fails to translate into homeownership for occupiers.

“The forthcoming hike is reportedly already having a distortive effect on housing supply, slowing transactions at the higher end of the London market and pushing prices up at the bottom end as people rush to complete home purchases before the new rules come into play in April. We believe the rules bring uncertainty into the housing market, which will have an adverse effect on our economy.”

Business rates reform

“Business rates are one of the biggest costs our SMEs face and their payment forms a critical part of financial planning. We hope the Government’s business rate review brings more clarity on future business rate reform. In order to encourage SMEs to invest in their businesses in 2016, we need a period of steady economic growth and a context of increased certainly over the future business landscape. Less taxation and red tape is crucial to ensure both companies and consumers invest in their futures.”

This was posted in Bdaily's Members' News section by Hampshire Trust Bank .