The British Institute of Fitted Interiors Specialists (BIFIS) has reacted to the Chancellor’s announcement of the Autumn Budget yesterday. As the leading body representing professionals in the fitted interiors sector, BIFIS remains vigilant regarding government policy and its direct impact on our registered businesses, the vast majority of whom are small and medium-sized enterprises (SMEs).
Whilst the Autumn Budget introduces certain headline changes, such as an increase to the national living wage, it does not address the full scope of challenges currently facing SMEs. Many businesses registered with BIFIS are already contending with escalating operational costs and must now factor in higher payroll expenses resulting from this change.
In addition, revisions to dividend thresholds present further financial hurdles for business owners, particularly those who rely on dividends as part of their remuneration. This adjustment will likely reduce take-home pay for many directors and entrepreneurs in our sector, compounding existing pressures and dissuading many from striding out on their own.
There is also significant concern regarding the newly announced tax on electric vehicle (EV) owners. As our industry embraces sustainability and encourages cleaner transportation solutions, this measure risks deterring the adoption of electric vehicles among small businesses, undermining environmental progress, and placing further financial strain on those who have invested in green technology.
A further area of frustration was the announcement regarding apprenticeships which, once again, feels like the Government is giving with one hand and taking back with the other. Further access to free apprentice training for SMEs and investment in the Youth Guarantee and the extension of the Co-Investment Relief is of course positive, albeit the fitted interiors sector already has access to training funding. The real concern for SMEs employing or considering employing an apprentice is the salary costs – which the Chancellor compounded yesterday with an 6% increase on the minimum wage for apprentices. The changes quite simply do not go far enough to have a meaningful impact on feasibility of SMEs taking on an apprentice, and nor will they unless there is a significant reform in the way that the apprenticeship levy monies can be accessed by micro, small and medium enterprises.
Despite considerable challenges, the Autumn Budget falls short of providing targeted support required for SMEs to survive and thrive. In fact, the cumulative measures announced yesterday may inadvertently hinder growth and innovation within the fitted interiors sector.
Damian Walters, CEO of BIFIS, commented: “The Autumn Budget, while introducing changes such as the rise in the national living wage and modifications to dividend thresholds, has missed critical opportunities to support the lifeblood of our economy, small and medium-sized businesses. The imposition of a new tax on electric vehicle owners is especially troubling for those in our sector who are committed to environmental responsibility. With mounting pressures from every direction, businesses require more than incremental adjustments; they need comprehensive, meaningful support to help them invest, grow, and weather ongoing economic uncertainty. We urge the government to reconsider its approach and deliver tangible assistance to SMEs, ensuring their vital contribution to the economy is not overlooked or undervalued.”
Positively, BIFIS welcomed the news that the rumoured changes to VAT thresholds were unfounded and that there was no change to the current VAT scheme, which not only ensures that additional administrative burdens are not faced by small business owners, but also that consumers will not be put off by rising prices through further stealth taxation.
BIFIS previously supported construction industry campaigns to scrap VAT on home improvement projects, to stimulate the market, so whilst relieved that thresholds remain unchanged, it is disappointing that the Chancellor has missed an opportunity to provide a real boost to the industry by addressing VAT on such projects.
