2017 Autumn Budget – what to expect

2017 Autumn Budget – what to expect

Chancellor Philip Hammond will deliver his 2017 Autumn Budget speech today at 12.30pm. We will be keeping you up to date on the key Budget announcements, and will be supplying a full summary which will appear on the site tomorrow morning.

Image result for 2017 autumn budget what to expectFollowing the release of new figures that revealed a rise in government borrowing in October, Mr Hammond faces an uphill battle in attempting to balance the books against a weakening economic backdrop.

In his Budget speech, the Chancellor is expected to announce a range of fiscal measures designed to help young people: Mr Hammond recently stated that it is ‘not acceptable’ that millennials are unable to get onto the property ladder.

As a result, many expect the Chancellor to announce a change to the way in which stamp duty land tax is charged for first-time homebuyers, with some experts predicting that Mr Hammond could scrap the tax altogether.

Meanwhile, others predict that the Chancellor will announce changes to income tax. He previously pledged to raise the personal allowance (PA) to £12,500 by 2020, and many anticipate that the PA could be frozen in today’s Budget speech.

The Chancellor is also rumoured to be considering a host of measures intended to help UK businesses, including an overhaul of the business rates system.

Following calls made by leading business groups, including the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC), Mr Hammond may seek to stall the upcoming 3.9% business rates rise, due to come into effect from April next year, and look to abolish the so-called business rates ‘staircase tax’.

Furthermore, some industry experts believe that the government may also lower the VAT threshold, which currently stands at £85,000. However, the FSB has warned that reducing this threshold will ‘drain small businesses of time and money’, and create ‘a real drag on business output’.

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TUC urges Chancellor to use Autumn Budget to ‘end wage squeeze’

TUC urges Chancellor to use Autumn Budget to ‘end wage squeeze’

The Trades Union Congress (TUC) has urged Chancellor Philip Hammond to use next week’s Autumn Budget to put an end to the ‘wage squeeze’ currently plaguing UK workers.

Official figures recently published by the Office for National Statistics (ONS) revealed that inflation ‘remained steady’ in October at 3%, with higher food prices being offset by lower fuel costs.

Image result for end wage squeezeMeanwhile, wage growth figures outlined that workers’ earnings, excluding bonuses, fell by 0.5% in real terms, when taking inflation into account. This represents seven months of negative pay growth.

Commenting on the new inflation and wage growth figures, the TUC called for Mr Hammond to ensure that UK workers are given a pay rise in the Autumn Budget.

Frances O’Grady, General Secretary of the TUC, said: ‘This is the seventh month in a row that prices have risen faster than wages. But ministers are still standing on the side-lines.

‘Running the economy is not a spectator sport – the Chancellor must have a game plan to give Britain a pay rise in next week’s Budget.’

The TUC also called for the National Minimum Wage (NMW) to be raised to £10 per hour ‘as soon as possible’.

Chancellor urged to remove age-related tax inequalities in Autumn Budget

Chancellor urged to remove age-related tax inequalities in Autumn Budget

In a new report, think tank the Resolution Foundation has urged Chancellor Philip Hammond to tackle age-related tax inequalities in the upcoming Autumn Budget.

Image result for Chancellor age-related tax inequalitiesThe Resolution Foundation has called for Mr Hammond to unfreeze working-age benefits in 2018 to help raise living standards for young families.

It also stated that, rather than adding new age-related inequalities into the UK’s tax system, the government should aim to tackle existing ones. As such, the Foundation suggested that UK workers of all ages should pay the same national insurance contributions (NICs).

The Resolution Foundation stated that equalising the tax treatment for workers of differing ages is progressive as ‘four-fifths of the revenues would come from the richest fifth of pensioners, with most unaffected’.

Commenting on the proposals, Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said: ‘In recent weeks the Budget run-in has focused on a looming economic downgrade and preparations for Brexit. But the Chancellor should remember the bigger picture and deliver a Budget that tackles one of the biggest challenges Britain faces – our failure to deliver living standards progress for young people today.

‘The Chancellor should avoid ill-advised tax cuts for the young. Instead he should remove existing age-related tax inequalities to help fund the unfreezing of working-age benefits next year.’

The Chancellor will deliver the Autumn Budget on Wednesday 22 November. Make sure you keep an eye on our website for coverage of the key announcements.

Brexit vote ‘has cost UK households £600 per year’, data suggests

Brexit vote ‘has cost UK households £600 per year’, data suggests

A study carried out by think tank the National Institute of Economic and Social Research (NIESR) has suggested that the Brexit referendum has ‘cost UK households over £600 per year’.

The NIESR stated that the Brexit vote caused sterling to depreciate, resulting in sluggish economic growth. The vote also contributed to a fall in living standards.

The think tank has now downgraded its growth predictions for the UK economy for this year and for 2018: the NIESR anticipates the economy to grow by 1.5% both this year and next year. These predictions are based on the prospect of the UK experiencing a ‘soft Brexit’, and do not take into account the effects of a ‘hard Brexit’.

The NIESR’s new predictions come in the wake of a ‘strengthening and broadening’ global economic recovery.

Garry Young, Director of Macroeconomic Modelling and Forecasting at the NIESR, commented: ‘It is almost certain that the relative deterioration in the UK economy and the accompanying fall in living standards over the past year are a consequence of the vote by the British people to leave the EU.

‘Had sterling not depreciated and the economy continued to grow at its previous rate, as would have been likely with an improving global backdrop, real household disposable income per head might have been more than 2% higher than now, worth over £600 per annum to the average household.’

Mr Young also called for Chancellor Philip Hammond to ‘make full use of the fiscal space available within the existing rules to accommodate any continued weakness in productivity’ in the upcoming Autumn Budget. He added that the government has ‘scope to relax fiscal austerity, whilst maintaining a long-term fiscal discipline’.

‘Immediate action’ required to stop business rates increases, BCC warns government

‘Immediate action’ required to stop business rates increases, BCC warns government

In its Autumn Budget submission, the British Chambers of Commerce (BCC) has warned the Chancellor that ‘immediate action’ is required to ensure that UK businesses aren’t hit with further business rates increases.

Image result for british chambers of commerce brexitThe BCC has urged the government to abandon the annual uprating of business rates for the next two years. It also called for the government to exclude plant and machinery from business rates valuations.

Echoing the call made by the Institute of Directors (IoD), the BCC urged the government to temporarily increase the Annual Investment Allowance (AIA) from its current rate of £200,000 per annum to £1 million, in order to ‘incentivise business investment during the Brexit process’.

In addition, the business group called for the government to refrain from imposing ‘more input taxes or other significant costs’ on firms, and urged the Chancellor to commit to ensuring adequate mobile coverage across the UK by 2020.

Commenting on the wishlist, Dr Adam Marshall, Director General of the BCC, said: ‘At a critical moment for the UK economy, the Chancellor must be bold – and deliver a big Budget that prioritises economic confidence and investment.

‘The best possible Brexit deal won’t be worth the paper it’s written on if conditions for growth aren’t right here at home. The Chancellor has a unique chance to move the dial on growth and productivity now, leaving the UK in a position to succeed over the long-term.

‘Action to slash the upfront costs faced by business, to incentivise investment and to improve mobile coverage and infrastructure would lead to a real boost to productivity, wages and trade.’

The Chancellor will deliver the Autumn Budget on Wednesday 22 November. Make sure you keep an eye on our website for coverage of the key announcements.

FSB urges Chancellor to ‘rule out business tax increases’ in Autumn Budget

FSB urges Chancellor to ‘rule out business tax increases’ in Autumn Budget

In its Autumn Budget submission, the Federation of Small Businesses (FSB) has urged Chancellor Philip Hammond to refrain from introducing business tax increases for UK firms in his Budget speech.

Related imageThe FSB also called on the Chancellor to maintain investment incentives, such as Entrepreneurs’ Relief (ER), the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).

In regard to Brexit, the Federation has called for the government to ensure that ‘no nation or region in the UK loses out after 2019’, and has recommended the introduction of exporting vouchers for small businesses who trade overseas.

The FSB believes that such vouchers would give prospective UK exporters the freedom to invest in the resources they need to start selling overseas.

Commenting on the FSB’s Autumn Budget wishlist, Mike Cherry, National Chairman of the Federation, said: ‘With the Brexit clock ticking, other nations are trying to tempt our businesses to their shores. The Budget marks an opportunity to position the UK as the best place in the world to invest in innovative firms.

‘If the Chancellor is serious about tackling the staggering disparity in productivity between different areas of the UK, he should replace EU funding according to existing allocations. No region or nation should lose out as a result of Brexit.’

The Chancellor will deliver the Autumn Budget on Wednesday 22 November. Make sure you keep an eye on our website for coverage of the key announcements.

CBI publishes Autumn Budget submission

CBI publishes Autumn Budget submission

The Confederation of British Industry (CBI) has published its Autumn Budget wishlist, outlining a range of measures that it believes will help the UK to ‘grow its way out of austerity’.

Image result for confederation of british industryThe business group has highlighted a host of strategies, designed to fuel business investment, spur innovation and promote competitiveness in the UK tax system.

It has called for the government to ensure that business rates ‘incentivise productive investment’, redesign the Apprenticeship Levy to ‘boost productivity growth’ and outline long-term plans for Insurance Premium Tax (IPT) and the corporation tax surcharge, with a view to phasing this out over time.

The CBI has also called for HM Revenue & Customs (HMRC) to be ‘properly resourced’ to ensure that the correct amount of tax is paid at the right time, in order to allow business owners to concentrate on running their business.

In terms of infrastructure, the CBI has urged the government to ‘immediately distribute’ the £490 million Spring Budget pledge to help ‘improve local infrastructure networks’.

Commenting on the submission, Carolyn Fairbairn, Director General of the CBI, said: ‘Faltering consumer and business confidence risks lowering living standards, so it’s important the government sends firms the right signals they need to continue investing and growing.

‘Ministers need to build on the basics to get our economy in shape for the challenges ahead by demonstrating a continuing commitment to free markets, a pro-enterprise environment and maintaining a relentless focus on the drivers of productivity.’