Spring Budget Statement – plenty of hints, light on substance?

By Anita Jaynes on 15 March, 2018

The Chancellor’s Spring Budget Statement passed with very little fanfare in March however it included some interesting nuggets for business owners and directors to consider.

He said debt and borrowing would be revised down (a little) and inflation is predicted to fall back down to the Bank of England’s two per cent target over the next year. He felt the UK’s public finances had reached a turning point and suggested there may be increased public spending in 2020.

Here are some business views from across Swindon and Wiltshire.

Martin Gurney, Haines Watts Swindon

Martin Gurney, tax partner at Haines Watts Swindon: “Although the Chancellor reserved the right to incorporate new tax measures into the Spring Statement, the pre-statement announcements gave a clear indication there were going to be no such changes.

“As a result the Spring Statement was light on content from a tax perspective, instead focussing mainly upon the Chancellor’s view of the performance of the Conservatives’ economic strategy.

Interesting announcements were:

 Bringing forward the next business rates revaluation exercise to 2021 with triennial valuations thereafter

 A review to be undertaken on how to deal with “late payers”

 Funding to help with apprentice schemes and some work placements

 Consultations to be undertaken on:

o  Collecting VAT for online transactions

o  Encouraging the use of digital payment

o  Tax cuts on low emission vans

o  Reducing the use of plastics

Jason Dutton, managing director of 4Networking which has groups in Chippenham, Swindon and across the South West, said there were some glimmers of light from the statement.

Jason Dutton, managing director of 4Networking

He said: “It’s positive the forecast for growth is moving up slowly and that many things which are of huge importance to SMEs were mentioned such as broadband, late payments and business rates. However there no details and no real timeline.

“The re-evaluation of business rates has been brought forward and a promise of a review every three years – for many business owners this feels like they will be asked to pay more.

The Chancellor stated his approach to borrowing was balanced, that he would see long term investment in the future, but also committed to public sector spending. Jason draws comparisons with business:

“As a business owner, you have to work out what you can afford and decide what your priorities are, but in order to grow you have to invest.

“At the moment, the lack of clarity around a whole host of issues, such as the long term impacts of Brexit and GDPR, means companies are reluctant to invest as the future is too uncertain.”

Whilst the £80m to support small businesses engaging apprenticeships is another welcome step, ambiguity is also affecting the potential for this initiative to be taken up wholeheartedly.

“Companies are preoccupied with assessing their data compliance, drafting in consultants, reviewing their online platforms and marketing strategies. While taking on an apprentice is worthwhile, it’s a big commitment and not one that everyone has the capacity to absorb at the moment,” Jason said.

“One thing I would say is SMEs need to make the effort to let Government know what their views are around plastic waste, training for the self-employed and the continued – or not – use of cash in business. We’re being asked for our views and we need to engage.”

Angela Ashworth & Oli Thomas of Purple Lime  wanted to highlight the consultation opportunities.

Angela Ashworth & Oli Thomas of Purple Lime

“Rather than focussing on boring things like tax allowances and rate reviews, we’d like to people’s attention to three important areas the government are seeking views on:

1) reducing plastic waste through the tax system £20 million will be given to business and universities to research ways to reduce the impact on our environment. The closing date for this is May 18 – https://www.gov.uk/government/consultations/tackling-the-plastic-problem

2) the role of cash in our digital economy, whilst ensuring that those who need to use cash are able to do so – the closing date for this is June 5 – https://www.gov.uk/government/consultations/cash-and-digital-payments-in-the-new-economy

3) looking at ways to extend tax relief to support the self employed and employees when funding their own training  – closing date for this is June 8 – https://www.gov.uk/government/consultations/taxation-of-self-funded-work-related-training