Chancellor of the exchequer, Philip Hammond today announced the plans for the UK economy in his Autumn Budget statement.
Expectations for the chancellor to plan for the potential effects of Brexit were answered as the chancellor called for the UK to ‘seize the opportunities’ while tackling deep-seated economic challenges ‘head on’.
Remarks were made of Mr Hammond as a safe and dull pair of hands to guide the nation’s budget through Brexit, despite criticism of his apparent cynicism over the vote. Many MPs were divided over whether the budget should be cautious and unremarkable in these uncertain waters, or if he should be bold and strive to bolster the economy as we prepare for Brexit.
In comments released ahead of the speech, Mr Hammond strikes an upbeat tone, saying he will use the Autumn Budget 2017 to ‘look forwards, embrace change, meet our challenges head on and seize the opportunities for Britain’.
During his announcement, Mr Hammond outlines his plans to, ‘ seek a deep and special relationship with our European neighbours and we want to build a strong and mutual respect between each nation.’
With that in mind, here is a summary of the Autumn Budget 2017 and how it will affect the small business community.
Autumn Budget 2017 – at a glance
The state of the economy
Growth forecast for 2017 reduced from two per cent to 1.5 per cent
GDP reduced to 1.4 per cent, 1.3 per cent and 1.5 per cent in subsequent years before rising to 1.6 per cent in 2021-22
Productivity growth and business investment also revised down
Annual rate of CPI inflation forecast to fall from peak of three per cent to two per cent later this year
Another 600,000 people forecast to be in work by 2022
£3 billion to be set aside over next two years to prepare UK for every possible outcome as it leaves EU
Annual borrowing £49.9 billion this year, £8.4 billion lower than forecast in March
Borrowing forecast to fall in every subsequent year from £39.5 billion in 2018-19 to £25.6 billion in 2022-23
Public sector net borrowing forecast to fall from 3.8 per cent of GDP last year to 2.4 per cent this year, then 1.9 per cent, 1.6 per cent, 1.5 per cent and 1.3 per cent in subsequent years, reaching 1.1 per cent in 2022-23.
Debt will peak at 86.5 per cent of GDP this year, then fall to 86.4 per cent next year; then 86.1 per cent, 83.1 per cent and 79.3 per cent in subsequent years, reaching 79.1 per cent in 2022-23.
£500 million for 5G mobile networks, fibre broadband and AI
£540 million to support the growth of electric cars, including more charging points
A further £2.3 billion allocated for investment in research and development
Income tax to be applied from April 2019 on digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction, raising about £200 million a year
Tax-free personal allowance to rise to £11,850 in April 2018
Higher-rate tax threshold to increase to £46,350
Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
£320 million to be invested in former Redcar steelworks site
Second devolution deal for the West Midlands
£1.7 billion transport fund for city regions
£2 billion for Scottish government, £1.2 billion for Welsh government and £650 million for Northern Ireland executive
Scottish police and fire services to get refunds on VAT from April 2018.
Education (England only)
£40 million teacher training fund for underperforming schools in England. Worth £1,000 per teacher
8,000 new computer science teachers to be recruited at cost of £84 million
Secondary schools and sixth-form colleges to get £600 for each new pupil taking maths or further maths at A-levels at an expected cost of £177 million
Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
In London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by first-time buyers will be exempt from stamp duty
80 per cent of all first-time buyers will not pay stamp duty
Long-term goal to build 300,000 new homes a year by the mid-2020s
£44 billion in government support, including loan guarantees, to boost construction skills
100 per cent council tax premium on empty properties
New homelessness task force
Compulsory purchase of land banked by developers for financial reasons
Review into delays in permitted developments going forward
£28 million for Kensington & Chelsea Council to provide counselling services for victims of the Grenfell fire and for regeneration of surrounding area
Pensions, savings and welfare
£1.5 billion package to ‘address concerns’ about the delivery of universal credit
Seven-day initial waiting period for processing of claims to be scrapped
Claimants to get one month’s payment within five days of applying
Rises to the National Living Wage from April are confirmed. It will rise 4.4 per cent, from £7.50 an hour to £7.83 – giving full-time workers a further £600 pay increase.
Repayment period for advances to increase from six to 12 months
New universal credit claimants in receipt of housing benefit to continue to receive
Health and social care
£2.8 billion in extra funding for the NHS in England
£350 million immediately to address pressures this winter, £1.6 billion for 2018-19 and the remainder in 2019-20
£10 billion capital investment fund for hospitals
Alcohol, tobacco, gambling and fuel
Vehicle excise duty for diesel cars that do not meet latest standards to rise in April 2018
Duty on beer, wine, spirits and most ciders will be frozen
But duty on high-strength “white ciders” to be increased via new legislation
Tax hike will not apply to van owners
Existing diesel supplement in company car tax to rise by one per cent
Proceeds to fund a new £220 million clean air fund
Tobacco will rise by two per cent above Retail Price Index (RPI) inflation while the minimum excise duty on cigarettes introduced in March will also rise, as will duty on hand-rolled tobacco