The emergency budget announcement has sparked
a wave of reactions from the leasing industry.

Edward Rimmer, UK chief executive at
specialist business finance provider, Bibby Financial Services, for
example, criticised the Chancellor for increasing VAT to 20%.

He said: “Osborne’s pledge to reduce the
budget deficit by focusing on lowering public spending rather than
increasing taxes wasn’t demonstrated by what many commentators
would agree was the focal point of the budget – the increase of

Rimmer added that the measure “could have
serious repercussions for firms” as smaller players “simply cannot
afford to subtract an additional 2.5 per cent from their profit and
loss account”.

He also said the government “must be cautious
over the prospect of a double-dip recession” but conceded the
budget “did have a number of positive ramifications for small and
medium-sized businesses”.

“The fact that small business rate relief will
be increased from October, meaning a tax reduction for 500,000
small firms, should be applauded, whilst [the] creative pledge to
support start-up businesses in regions outside of London and the
South East by giving them an NI ‘holiday’ for the first year of
trading is well received,” Rimmer said.

The Forum of Private Business, on the other
hand, said it “welcomed a number of key victories for SMEs in [the] budget”.

This included the extension the Enterprise
Finance Guarantee scheme, although concerns have previously been
raised as the scheme did not include leasing in the forms of
finance it was prepared to guarantee.

Julian Rose, Head of Asset Finance at the
Finance & Leasing Association, said the budget “slightly
exceeded expectations” in “removing the bias against leasing in the
tax system” and added that the leasing industry is now in a
position to show how it can support economic recovery.

Measures such as the “modest cut” to capital
allowances were welcomed by the association.

Claire Hack