As promised, the traditional Spring Budget has been replaced by a smaller Spring Statement this year. It’s the little brother to the Autumn’s main Budget, which is now the main platform for the Chancellor to announce major new measures, tax and spending changes. Nonetheless, it was with a spring in his step that Philip Hammond delivered his announcement this week – offering up a few interesting surprises too.
Below, the Keytime team has summed up the Spring Statement highlights, as well as the key points covering tax and business, that you may find useful:
- 3 million more people in work since 2010
- GDP growth forecast increased to 1.5% from 1.4% in 2018
- Employment growth predicted to be 32.7 million by 2022, up by 500,000 from this year
- Inflation is expected to return to 2% over the next 12 months
- Borrowing is forecast to be £45.2 billion this year, which is £4.7 billion lower than forecast
- 31 million working people are paying less tax by the raises in the personal allowance
- Fuel duty has been frozen for the 8th year in a row
- The National living wage will rise to £7.83 from 1st April 2018
- £80 million of funding support will be available for SMEs seeking to recruit an apprentice
- A business rates revaluation has been brought forward by a year to 2021
- £95 million has been allocated towards full-fibre broadband for 13 areas across the UK
- Housing supply to raise to 300,000 per year by the mid-2020s, with at least £44 billion invested
- 60,000 first-time buyers have already benefitted from the Stamp Duty relief announced in last year’s Autumn Budget
The Spring Statement was also a big chance to announce some hot topics that the Government are seeking views on – and the Chancellor seized his chance! He announced several tax consultations and calls for evidence, which hints at what is likely to make an appearance in the Autumn Budget or change in the future:
- A review into the taxation of large digital businesses
- Proposals for a new VAT collection mechanism for online sales
- Call for evidence on how the VAT registration threshold impacts the productivity of SMEs
- Reducing single-use plastic waste through the tax system
- Investigation into encouraging cashless and digital payments, while ensuring cash remains available for those who need it
- Environmentally-focused consultations on non-agricultural red diesel tax relief and vehicle excise duty rates
- Extending the current tax relief to support self-employed people and employees when they fund their own training benefitting both individuals and the wider economy.
So, plenty of interesting snippets in the first Spring Statement, but it is Autumn that will offer the bigger decisions and potential shake-ups – especially for tax and small businesses. The team at Keytime will keep you updated nearer the time, with predictions on what to expect as well as a full round-up of all you need to know.