Chancellor Philip Hammond told the House of Commons he was feeling “positively Tigger-like” as he presented his Spring Statement 2018 on 13 March. But how many bouncy things did his speech have in store?
As it turned out, very little new information was announced. In line with the government’s plans to switch to shift to 1 major fiscal event a year instead of 2, the statement was a fairly low-key event.
The focus of the speech was on the latest economic forecasts from the Office for Budget Responsibility (OBR), along with a series of consultations which could hint at changes to come.
Economic forecasts
The OBR upgraded its forecast for UK growth to 1.5% – an increase of 0.1% on its last prediction in November 2017. However, this is still expected to slow to 1.3% for 2019 and 2020.
Borrowing fell to £45.2 billion, which was £4.7 billion lower than the OBR’s November 2017 forecast.
Debt as a share of GDP is also expected to start falling from the next tax year.
Despite this short-term momentum, the OBR commented that the outlook for the UK economy and public finances in the medium term was “broadly the same” as it forecasted in November.
Consultations
Among the consultations mentioned in the speech were a “call for evidence” on cash and digital payments, and a review of the way self-funded work-related training is taxed.
The government is also seeking views on how the current VAT registration threshold affects small business growth.
The next business rates revaluation will be brought forward by one year, to 2021.
Following a closed consultation the taxation of digital multinationals, the government published a position paper which highlighted key points from the review.
Read an in-depth look at the consultations announced in the Spring Statement on our website.
Looking ahead to Autumn Budget 2018
Unlike the Spring Statement, Autumn Budget 2018 will be a major fiscal event, so there’s scope for tax changes to be introduced.
It’s possible that the consultations announced in the Spring Statement could lead into legislation in November, but first they’ll undergo scrutiny by the government and stakeholders.
With the scheduled Brexit date in March 2019 looming ever closer, there’s also a chance for major changes to be brought in as the UK prepares to leave the EU.
Get in touch
Contact us to talk about how these announcements affect you by calling 01628 631 056, or email tracya@knightandcompany.co.uk.
You can read more about the announcements made on the day in our full Spring Statement report.