Spring Budget 2017 – the policies that matter for businesses

As predicted we had a very restrained Spring Budget from Chancellor Philip Hammond this morning, with very few freebies being thrown around and little to get excited about – the Office for Budgetary Responsibility’s post-Budget briefing had a few more interesting tidbits though it wasn’t exactly fighting against tough competition.

One interesting chart that came out was showing that the UK tax burden has now reached a 50-year high – something that businesses will be acutely aware of and would have liked to have seen that burden lessened by the Chancellor today. But alas, Philip was not handing out any gifts today. The absence of giveaways pours cold water on speculation that Theresa May could call a snap election to bolster her majority ahead of a European Union exit.

In his preamble to any policy announcements, Hammond announced that among the major economies the UK’s growth was second only to Germany and that the OBR had upgraded its growth forecast for next year from 1.4 percent to 2 percent. In addition, the employment rate has risen with unemployment falling fastest in Yorkshire and Wales.

Getting into the policy announcements, Hammond tried to address concerns over the prospect of sharp business rate hikes when revaluations hit on 1st April.

The Chancellor announced three measures

• Any business that will be taken above the small business rate relief threshold after revaluation will benefit from an extra cap – meaning rate increases will be limited to £50 a month.
• In addition, there will be special provision for pubs with a £1,000 discount for all pubs with a rateable value of less than £100,000 which applies to 90 percent of pubs in the UK
• Councils will be given a £300m fund allowing them to provide discretionary rate relief.

While some businesses facing a steep increase in their business rates will let out a small sigh of relief at these measures, the Chancellor stopped a long way short of any overhaul of business rates or an introduction of more frequent valuations reducing the opportunities for drastic increases in rates. It’s a measure of just how dull a Budget it was that a highlight was a freeze in vehicle excise duty for hauliers, as well as a freeze in the HGV road user levy.