IoD continues to urge the Chancellor to introduce tax incentives for retraining in shortage skills areas

Responding to the Chancellor of the Exchequer’s Spring Statement, the Institute of Directors has welcomed the commitment in his new Tax Plan to explore using the tax system to incentivise businesses to invest in workplace training, in line with the IoD representations to the Chancellor earlier this month, as well as the commitment to cut and reform taxes on business investment.

However, the IoD is disappointed that the upcoming rise in employers’ national insurance will continue to go ahead, particularly in the light of future rises in corporation tax and given that receipts have now come in higher than was anticipated at the time the decision was made.

Kitty Ussher, Chief Economist at the Institute of Directors, said:

“We have long been arguing for stronger tax incentives for workplace training, so we are pleased with the commitment to work with business to consider this in the autumn Budget. There exists a market failure around upskilling and reskilling within the workforce, particularly for smaller companies, and this urgently needs correcting, so we will be urging the Chancellor in the months ahead to provide tax incentives for retraining in shortage skills areas.

“Similarly, in times of great uncertainty, business leaders need to feel more comfortable with undertaking the types of investment that our economy needs, so we strongly welcome the commitment to cut taxes for business investment and look forward to working with government on the detail in the months ahead. We also support the certainty provided by publishing a Tax Plan in itself, and those businesses that rely on transportation will welcome the cuts in fuel duty.

“However, we are disappointed that the Chancellor has decided to press ahead with the 1.25% hike in employers’ national insurance from April. Although the increase in Employment Allowance is welcome at the margin, it pales into insignificance compared to rise in the main employers’ rate, which raises costs and pushes up inflation in already difficult times.”