When I had a look at what I could see from the Spring Statement that may be of interest to our readers, I saw that there was relatively little to report. This was always intended to be a slimmed down statement, with the real detail coming in the Autumn.
The chancellor, Philip Hammond, did appear to be fairly upbeat when he delivered his 26-minute speech, however, this was far less detailed than a full budget.
He was pleased to announce marginal improvements in the economy, with figures showing a sustained fall in debt in 17 years. He felt that this was “a light at the end of the tunnel” and showed the nations recovery from the financial crisis.
However, GDP is expected to be down in 2021/22 despite that recovery. Let us compare the Autumn budget predictions to the predictions now:
2018 1.4% – 1.5% Up
2019 1.3% – 1.3% Same
2020 1.3% – 1.3% Same
2021 1.5% – 1.4% Down
2022 1.6% – 1.5% Down
The National debt will fall quicker than previously expected. Let us compare the Autumn budget 2017 prediction (% of GDP) to the predictions now:
2017 – 18 86.5 85.6 Down
2018 – 19 86.4 85.5 Down
2019 – 20 86.1 85.1 Down
2020 – 21 83.1 82.1 Down
2021 – 22 79.3 78.3 Down
2022 – 23 79.1 77.9 Down
He announced how 1.5 billion will be spent for Brexit in 2018/19, assuming a no deal outcome, with vast amounts going to border and passport controls.
There is likely to be a rise in tax on single use plastics to help curb the use of these products.
Employment has increased by 3 million
There are no new pots of cash for housing, but 60,000 first time house buyers have already benefited from the stamp duty relief announced at the autumn budget.
He announced that there will be a full spending review held in 2019, which could announce additional spending if there is continued increase in the finances.
The business rates revaluation will be brought forward from 2022 to 2021 and will then be reviewed every three years from there.
There government will consult on a new VAT mechanism for online sales to ensure multinational digital firms pay their fair share of tax.
As more people are moving towards digital methods of payment the government would like to make sure that people can continue to pay with cash, and at the same time to prevent the use of cash for tax evasion and money laundering.
So, as you can see, this statement did not hold a lot of detail and I suspect I will have more interesting things to report after the Autumn budget.
Kristina Bailey Dip FA CeMAP
This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.