As with many previous Autumn Statements, the key spending announcements had been made in the lead up to the speech by the new Chancellor, with his time at the despatch box mainly spent running through the general health of the economy. Given the external influences to the UK economy, it was anticipated that this Statement may be a ‘steady as she goes’ affair, and for once, the polls appear to have been largely correct.
In line with our mission statement of being the best all-round advisers to owner-managers we have waded through the Budget report to pick out the areas of importance to you and your business.
Where necessary, we have included details of announcements from previous Budgets and Autumn Statements to highlight the changes that will most affect you and your business in the coming months.
It has certainly been a year to remember – time will tell whether it is for the right or wrong reasons.
Brexit, Trump as US President, Middle East unrest and the possible resurgence of Russia as a world power have all had their impacts on the financial markets, although with the exception of the weakness in Sterling, none appear to have had particularly long-lasting negative effects (up to the time of writing).
Indeed, according to the Office of Budget Responsibility, Britain appears to be faring slightly better than most other developed economies, with growth forecasts for 2016 marginally higher than predicted in March. However, the growth rates for 2017 and 2018 have been downgraded following the EU referendum result, with the plan to hit a Budget surplus in 2019/20 now dismissed until early in the next Parliament.
Philip ‘the Boring Accountant’ Hammond’s first Autumn Statement did continue in a similar vein to that of his predecessor, George Osbourne, with investment in infrastructure and technology paid for by further borrowing being the main talking point.
There was relatively little of significant note announced in respect of tax changes that will affect most small business owners – his focus no doubt being improving the so-called ‘Productivity Gap’ or the efficiency of labour in the UK as compared to other developed countries.
With ‘rabbits being pulled out of hats’ often used as an image for describing any big giveaways, the only real trick this time was the swap of the Budget and the Autumn Statement, from this time next year to be an Autumn Budget and Spring Statement. Still, at least it will provide everyone with more notice of planned tax changes in the future!
Read in further depth about the effect on Owner Managed Businesses
Read in further depth about the other announcements from the 2016 Autumn Statement
‘Raising productivity is essential for the high-wage, high-skill economy that will deliver higher living standards for working people.’
Philip Hammond, Chancellor of the Exchequer
'We’ve heard today there’ll be more taxes, more debt and more borrowing. The verdict could not be clearer – the so-called long-term economic plan has failed.'
John McDonnell - Labour Shadow Chancellor
‘His emphasis on R&D, housing and local infrastructure will help businesses in all corners of the UK to invest with greater confidence for the long-term, during turbulent times. This will be warmly welcomed.’
Carolyn Fairbairn, Director-General, Confederation of British Industry