The Chancellor, Philip Hammond, has announced that he will update the country on the state of the economy on Wednesday 22 November 2017, with the first Autumn Budget since the abolition of the Autumn Statement.
Mr Hammond announced at the Autumn Statement in 2016 that there would no longer be two major fiscal statements each year. This means that the Autumn Statement has been replaced by the Autumn Budget and there will no longer be a Spring Budget, but instead a Spring Statement. Is that clear (as mud!)? So, what does this mean in practice?
While there will be a Spring Statement from 2018 onwards this will, for the most part, only be a means of responding to the Office for Budget Responsibility’s (OBR) forecasts for the country’s economy and will not constitute a “major fiscal event”. In other words, there shouldn’t be any major tax changes.
However, should there be significant and unexpected changes within the economy, the Government have the flexibility to include necessary actions at the Spring Statement, though the details of how this will work in practice are not yet clear.
It was stated that this timetable would bring us much more in line with other major global economies and it also means that tax changes will be revealed well in advance of the new tax year beginning 6 April 2018, supposedly providing better stability in the long-term.
In terms of what to expect from the upcoming Budget, some are predicting a shake-up for stamp duty; the suggestion is that exempting older property owners from the charge would encourage them to downsize, in turn freeing up homes for young families. A shake-up of student loans is also rumoured, as the Chancellor continues to do what he can to appeal to the younger voters and it is also thought that there could be significant changes afoot for pensions.
Whether these predictions will be realised remains to be seen, however Hammond has been clear on the fact that he intends to use the 22 November as an opportunity to set out the thinking behind the Government’s intention to maintain a fair economy for all.
Tax Partner at George Hay, Phil Blackburn, commented: “It will certainly be interesting to see how the first Autumn Budget will pan out and whether the Chancellor delivers on his promise to not make significant changes to the tax system ‘just for the sake of it’.”
“As accountants, we’re all for our clients having longer to accommodate any significant changes announced at these fiscal events. With an extended period between the Autumn Budget and the start of the new tax year, it will be equally as interesting to observe what impact this has on businesses and business owners.”
Here at George Hay, we understand that these announcements affect every individual, family and business up and down the country. It’s vital that businesses and business owners understand how the Budget will impact upon their operation going forward and so, following the Chancellors address on the 22 November, if you’re struggling to work out what it all means, please get in touch with a member of our team on 01767 315010.