Spotlight On: Autumn Budget 2017
The Spring Budget brought some interesting announcements in the wake of the referendum. Growth in the UK economy had picked up through 2016; employment reached a record high of 31.8 million people. The Office for Budget Responsibility (OBR) forecast that the UK economy would grow by 2% in 2017 although while in 2009-10 the UK borrowed £1 in every £5 that was spent, it was set to be £1 in every £15 for this year.
In terms of tax, the Chancellor had announced a deferral of Making Tax Digital (MTD) for small businesses and landlords with turnover below £85,000, a reduction in the tax free dividend allowance form £5,000 to £2,000 from April 2018 and an increase in the main rate of NIC’s for the self- employed. Interestingly, in the aftermath of the budget, the hike in Class 4 NIC’s was scrapped, with a threat that this gap in revenues would have to be plugged in the next budget; MTD has been deferred for all by a year now and will now affect VAT registered businesses first as opposed to landlords and the self-employed, with the change in the dividend nil rate band being the only announcement where no major alternation to the original proposal was made.
So where do we stand today? Philip Hammond will be boosted by figures released this week that show the budget deficit is the lowest it has been for a decade. The Conservative manifesto promised “a balanced budget by the middle of the next decade”. Faced with slow growth and the possibility of a Brexit-induced contraction of tax revenues, the journey to deficit elimination looks precarious.
Given this is the second budget of the year, it is it is questionable as to whether there will be too many changes. That said, speculation is rising and we have summarised some of the rumors circulating in national press.
Chancellor Philip Hammond will deliver Autumn Budget speech on November 22, 2017. Bookmark this page for all the latest news from the Autumn Budget 2017.