The Chancellor’s first Spring Statement has hinted at larger moves in this year’s Autumn Budget, which needs to consider the needs of smaller businesses.
Even before the Chancellor rose, HM Treasury had played down the impact of the first Spring Statement.
It had been touted as a ‘mini-budget’ with little or no tax changes or spending announcements, and yet Philip Hammond’s speech ended up delivering a few small measures to help businesses to grow.
However, we beleive that underneath the small giveaways there were more important indications that the Government might be changing track on its spending plans – possibly signalling an end to more than a decade of austerity.
Amongst the announcements made by the Chancellor were a new £80 million fund to help small businesses to recruit new apprentices, the release of £95 million to help bring high-speed fibre broadband to new areas in the UK and a change to the date of the next business rate revaluation from 2022 to 2021 – reducing future rates bills for businesses.
He also provided an overview of the economy using the latest figures from the Office for Budget Responsibility, which showed that in the short-term GDP growth would rise, only to slow again in the long-term.
Peter McMahon, Tax Partner at Grunberg & Co, said: “We weren’t expecting much from the Spring Statement, with the Chancellor and the Treasury going out of their way to downplay the speech.
“However, it would be fair to say that there were a few measures included in the Statement that were unexpected.
“Yet the biggest thing to come out of the Statement was the suggestion that the Government could be looking to increase spending later in the year – bringing to an end more than 10 years of austerity.
“It is now vitally important that the Government engages with businesses to see how funding and future measures can be directed to provide benefits that ensure they are able to grow and become more productive.”
Peter added that businesses needed to become more vocal about the changes they needed while also preparing themselves to take advantage of any opportunities that may come out of the Autumn Budget later this year.
In the hours following the Spring Statement the Treasury released a number of new consultation documents, including most importantly a review of the VAT threshold, with a view to removing the tax barriers that prevent small businesses from growing.