Reactions to the Autumn Budget
Autumn Budget overview
Perhaps the biggest news to come from Philip Hammond’s second Budget this year was the sharp cut to UK growth predictions. The Chancellor downgraded productivity, growth and business investment forecasts fairly substantially. The Office for Budget Responsibility (OBR) now expects the economy to grow by only 1.5% this year, down from the estimate of 2% it made in March. Furthermore, they believe growth will drop to 1.3% by 2020 before rising to 1.5% by 2021.
Other notable points from the Autumn Budget include:
- Stamp Duty Land Tax has been abolished for first time buyers on homes costing up to £300,000, and on the first £300,000 of properties costing up to £500,000
- Tax-free personal allowance on income tax set to rise to £11,850 in April 2018, with the higher-rate tax threshold to increase to £46,350
- VAT registration threshold is to stay at £85,000 for the next two years
- £3 billion is to be set aside over next two years to prepare UK for every possible Brexit outcome as UK leaves EU
- Increase in Enterprise Investment Scheme investment limit from £1m to £2m, provided any amount over £1m is invested in one or more knowledge-intensive companies.
Reactions from MHA Carpenter Box
Construction and Real Estate
“The additional funding support for housing is good news for the construction industry. And while we welcome the Stamp Duty withdrawal for first time buyers, we are yet to see what the impact will be on housing prices.”
Robert Dowling, Head of Construction and Real Estate
Manufacturing and Engineering
“On the skills front, there is a further £600 for each new pupil taking maths or further maths at A Level and some extra resource promised around the recruitment of computer science teachers. Once again though, it appears that there is no real strategy to meet the skills challenge in engineering. We now await the Industrial Strategy white paper and hope that it will set out a more positive pathway to promoting UK manufacturing and engineering as we strive to make and export more.”
Chris Coopey, Head of Manufacturing and Engineering
“The increase in personal allowances and basic rate band would mean a reduced income tax liability of £45 per month for higher rate taxpayers, and £14 per month for basic rate taxpayers from April 2018.”
Karen Thomas, Associate, Tax Services
“Dealers will be hopeful that the minimal impact of this Budget on the sector will help turn-around falling volumes and bring car replacements back up the priority list for buyers, especially for those looking to step out of diesels.”
Chris Reeves, Head of Motor Retail
Restaurants and Hospitality
“The Autumn Budget sees a freeze on so called “booze duty”, which is welcome news for anyone running their own restaurant, licenced premises or brewery. And some pubs in England will also see the discount on business rates apply, which further relieves cash-flow pressure.”
Nathan Keeley, Head of Hospitality
“Good to see the NHS being granted extra money but the key factor will be on how that is allocated. With the development of medical science meaning an ageing population, the demands are ever increasing.”
Jeff Huggins, Head of Healthcare
“While investment limits have doubled for EIS investors, the rules around capital preservation have been tightened. Individuals seeking to invest in small businesses will need to understand that despite the underlying tax benefits, the risks are high and the potential for loss could be a reality.”
Simon Fox, Managing Partner, Carpenter Box Wealth Management
For a full round-up of the Spring Budget, read our Budget Summary Report.
If you have any queries about how any of the above may impact you or your business please get in touch with a member of our Tax Team on 01903 234094.