The Uk's official budget statements is due on the 11th March, and we're exepcting to hear on a myriad of important topics. Below Finance Monthly hears from Brendan Sharkey, Head of Construction and Real Estate at MHA MacIntyre Hudson, on the potential tax reforms experts woudl like to see postively impact capital investment, renovations and retirement builds.
The green light for HS2 was good news and freeports would stimulate the construction sector if they end up being approved. On the other hand, the IR35 reform is going to bite hard in April and the general level of investment could still be improved.
A number of reforms to tax rates and reliefs are overdue and the budget would be as good a place as any to push them through.
It is never a bad idea to encourage investment in plant and machinery, particularly when the proposed immigration reforms will shrink the labour pool in certain parts of the country, so the Chancellor would be well advised to raise the Annual Investment Allowance (AIA) which currently stands at £200,000.
A reduction in Stamp Duty would also be welcome; the tax inhibits buyers in its current form. An exemption for older people looking to downsize could also stimulate the market for specialist retirement accommodation, where the UK still lags the likes of the US and Australia.
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VAT on renovations also ought to be reduced to 5% across the board. It is of course sometimes possible to pay at this lower rate, but this ultimately depends on the circumstances. HMRC could simplify this procedure and help bring older properties back into circulation by mandating that the rate should always be 5%, particularly if this helps towards energy saving.
Finally, Entrepreneurs’ Relief needs to be retained. It does aid business creation in the construction sector, but reducing the cap to say £3m from £10m and requiring the shares to have been held for a longer period would target the relief at smaller hard-working SME owners who have invested considerable time in their businesses.”
Collinson Group research has revealed that just 38 percent of bank and financial service customers in the UK feel rewarded for their custom. Customers are looking for more opportunities to earn loyalty currency and more choice when redeeming their points.
Reward and recognition are becoming increasingly important for customer retention and revenue growth. As regulators encourage greater competition in the financial services market, new competitors emerge and consumers are given more opportunities to compare and switch services. Brands must consider how best to remain attractive to this sophisticated set of consumers who have a greater access to information and are always after the best value for money.
The Collinson Group research with 2,250 consumers across the United States, United Kingdom, Singapore and the UAE revealed that more than three quarters of respondents (77 percent) look for loyalty programmes with a greater choice of rewards. Furthermore, four in five respondents (82 percent), said that the value of a programme decreases when there is only a limited range of rewards available.
In the UK, research respondents cited three ways that financial services loyalty programmes could be improved: the ability to combine points with cash (37 percent), have a larger selection of rewards (37 percent) and a simpler user experience (33 percent). This indicates that usability and accessibility of rewards are top of mind for financial services loyalty programme members.
Two of the strongest categories of reward that are most popular with global financial services customers are travel and leisure. In the UK, customers consistently place a high value on benefits such as airport lounge access, concierge services and unique social and cultural leisure experiences[1]. Collinson Group research reinforces that customers value products and experiences offered outside of company core inventory as part of a financial services loyalty programme.
Respondents also expressed a desire to have more redemption opportunities. In fact, 66 percent of global financial service customers said that they specifically look for a loyalty programme that has both in-store and online redemption capabilities. This capability does not currently feature in many financial services loyalty programmes, with 70 percent of UK respondents revealing that they would like the opportunity to redeem in-store. An enhanced redemption experience is delivered through a programme that offers the customer the ability to redeem in both retail outlets and leisure stores, as well as an e-commerce platform. Survey respondents were clear that the value of a loyalty programme decreases if points cannot be redeemed in physical retail outlets, with 51 percent in the country agreeing.
Christopher Evans, Director at Collinson Group said:
“Traditional financial services models continue to evolve, with a focus on improved digital services and experiences, but a key area brands need to consider is how they recognise and reward existing customers. Other sectors such as travel and retail are demonstrating new ways of offering more personalised, timely and relevant rewards.
“A key element in enabling this is providing customers with more ways to earn and redeem loyalty currency. Offering the opportunity to ‘spend’ points against non-financial products such as travel, leisure or more altruistic rewards is increasingly attractive to programme members. The chance to redeem points in physical stores such as retailers and to part-pay with loyalty points and cash all make programmes more relevant and therefore more valuable to consumers.”
[1] Collinson Group mass affluent research – rethinking the customer relationship: https://www.collinsongroup.com/insights/consumers-shun-loyalty-programmes-forcing-brands-to-rethink-the-customer-relationship
