THE PEER-TO-PEER lending sector lambasted Chancellor Philip Hammond’s Spring Budget for failures on a number of fronts including business taxes, innovative finance ISA (IFISA) rules and housing.
P2P platforms have blasted the fiscal announcement for not doing enough to improve the tax regime for small businesses, many of which are facing higher costs from April.
Under the government’s business tax revaluation, costs may rise substantially for some small-sized businesses and start-ups, potentially putting a strain on a vital source of economic growth.
“The revaluation has undoubtedly raised some hard cases, especially for those businesses coming out of small business relief,” said Hammond.
Liam Brooke, co-founder of Lendy, which owns P2P platform Saving Stream, said that the revaluation of property – that will raise taxes for businesses with a large bricks-and-mortar presence – was behind the times.
“As more of the economy moves to the internet the idea of having business property as a major source of tax seems more and more anachronistic,” he said.
“The further amendments made to business rates in today’s budget showcases the complexity of the system for business occupiers.
“In order to simplify the system it would be useful if business taxes were separated from a business use of property.”
Assetz Capital, which had expressed concerns about business taxes and called for better rules on IFISAs ahead of the Budget, said the speech disappointed on both fronts.
“Very little was announced of relevance to SMEs, or indeed their lenders,” said the firm’s chief executive Stuart Law.
“Hammond has missed a chance to take a fatal flaw out of the IFISA that prevents investors investing across multiple P2P platforms in the same tax year – leaving investment diversification very difficult for people.”
The budget also failed to ease the pressure on housing supply, according to Landbay’s chief executive John Goodall.
Read more: Landbay: The next steps
“For all the talk of easing the pressure on affordability in last month’s housing white paper, Hammond’s Budget was underwhelming to say the least,” he said.
“By not raising the stamp duty threshold, the chancellor has missed a valuable opportunity to improve access to the housing ladder for millions of aspiring homeowners in the UK, for many of whom the tax is the final straw when facing prices that continue to climb.
“Stamp duty is a significant barrier to liquidity in the market and any increase to the threshold would help to reverse the falling home ownership numbers and transaction volumes. I hope the situation is reviewed in the Autumn Budget.”
Read more: UK government steps up fintech strategy