The most noticeable aspect of the final Spring Budget (for the foreseeable future) was the brevity and lack of anything new! From reading the content of the detailed analysis, the majority of measures which have been “announced” have actually been released previously or are minor amendments to existing strategies. This can be seen from the simplicity and shortness of the documentation supporting the 2017 Spring Budget.
For the North East, there were few specific mentions of measures focused on our region (with the exception of infrastructure funding), but at the same time the lack of major reform also allows for a period of certainty – which is welcome. Notably, whilst there had been commentary from the Government that the Budget would encourage positivity ahead of Brexit, there was little mention of the impact of Brexit, positive or negative.
The tax related measures were mainly limited to raising taxes from the self-employed and owner-managed businesses, whilst softening the impact of previously announced changes to Business Rates and Stamp Duty Land Tax.
For owner-managers and the self-employed, there were increases in Class 4 NIC and reductions in the dividend allowance. These changes will be expected to impact on a large number of businesses, sole traders and the self-employed across our region. However, the Chancellor was open about making these changes to raise revenues to pay for increases in Social Care and to help fund the softening of the impact of the Business Rates increases. The Chancellor has also sought to remove any disparity in tax payable between the employed and the self-employed to ensure that those opting for the ‘Gig economy’ are doing so for commercial rather than tax reasons.
From an administrative perspective, the deferral of entry into Making Tax Digital for businesses below the VAT threshold is also helpful.
The Chancellor has continued to express his support for ensuring the UK leads as a centre for innovation by bringing forward simpler administration for the R&D Tax Credits mechanism which provides funding for many companies in our region. Measures to support the Governments Industrial Strategy, including the Industrial Strategy Challenge Fund and the introduction of T-Level technical education routes are also to be welcomed.
Overall, whilst there was little of substance, in a period of wider economic uncertainty for once no news is probably good news.