Highlights of the 2018 Spring Statement
It’s all change this year, with the Spring Budget being replaced with a smaller Spring Statement. The main purpose of the Spring Statement is not to announce immediate tax changes or spending policies, it is to give the UK an update on the state of the economy and public finances. The Autumn Budget will now be the major platform for tax and spending changes being announced by the Chancellor.
13 March 2018 marks the date of the first ever Spring Statement, the Chancellor no longer appeared outside 11 Downing Street with his red box. Philip Hammond instead unveiled the latest economic forecasts in a short statement, predicted to be 15 minutes it actually lasted 29 minutes.
Here is a quick glance at the facts he highlighted during his speech; Current health of the UK economy:
- 3 million more people in work since 2010
- GDP growth forecast increased to 1.5% from 1.4% in 2018
- Employment growth predicted to be 32.7m by 2022, an increase of 500,000 from this year
- Inflation expected to return to 2% over the next 12 months
- Borrowing is forecast to be £45.2 billion this year, £4.7 billion lower than forecast
- 31 million working people paying less tax by the raises in the personal allowance
- Fuel duty frozen for the 8th year in a row
- National living wage will rise to £7.83 from 1 April 2018
- Business rates revaluation brought forward to 2021
- £95 million allocated towards full-fibre broadband for 13 areas across the UK
- Housing supply to raise to 300,000 per year by the mid-2020s with an investment of at least £44 billion
- 60,000 first-time buyers have already benefitted from the Stamp Duty relief announced in last year’s Autumn Budget
More importantly to accountants and businesses, the Spring Statement was an opportunity to announce some ‘hot topics’ the Government are seeking views on. These items will more than likely make an appearance in the Autumn Budget, so this gives a good guide to what changes the Chancellor is considering in the future.
- Reducing single-use plastic waste through the tax system
- Making sure multinational digital businesses pay a fair share of tax
- How to encourage cashless and digital payments while ensuring cash remains available for those who need it
- Extending the current tax relief to support self-employed people and employees when they fund their own training benefitting both individuals and the wider economy