The emergency Budget has been given the thumbs down by more than 100 businesses in Northern Ireland who were quizzed for an exclusive Belfast Telegraph survey.
Results of the survey by accountants Goldblatt McGuigan showed most did not expect last week’s much-anticipated Budget to have a positive impact on their firms or promote recovery.
Chancellor George Osborne’s provisions for reducing the deficit included an increase of 2.5% in VAT to 20% and a two year public sector pay freeze. Business-friendly measures included a cut in the main rate of corporation tax from 28% to 24%, while the small business rate was cut from 21% to 20%.
Almost half of the 115 firms said the budget would have a negative impact on businesses while 15% said it would have no impact on them. Just over 40% said it would not help recovery.
Sam Goldblatt, a partner of Goldblatt McGuigan, said he was not surprised by the lukewarm reception.
“It is clear that from the findings of the survey that the majority of local businesses see the measures announced in last week’s emergency Budget at best as broadly neutral with no real positive benefits for their businesses,” he said.
“Given that so many companies are struggling to make a profit in these challenging times, the reductions in corporation tax will have little positive impact in the short term.
“The increase in VAT from 17.5% to 20% is a major concern particularly for those businesses involved in retailing, hospitality and leisure and the provision of services to the non- business consumer.
“One cannot help but conclude that his Budget will have the effect of dampening the economy and it is clear from the findings of this survey that the local business sector is expecting tough times in the short term and see any economic recovery as a longer term prospect.”
Stephen Magorrian, managing director of Botanic Inns, said his biggest concern was the VAT rise.
“All our costs will go up and as a result we will have to increase our prices. This will inevitably have an impact on trade as quite simply, people will have less cash,” he said.