One-liners and comic timing biggest budget surprises

Jenny Batchelor

Jenny Batchelor, Partner, Grant Thornton South West: “At today’s Budget the biggest surprise was the extent of the Chancellor’s one-liners and comic timing.

“At a time when the economy is still sailing forward in growth terms at least Phillip Hammond resisted the temptation to cut and run. To the extent that there were giveaways, these were modest, except for the additional spending on social care and education – the latter focused on free schools and technical learning so vital to the boost needed to productivity.

“We heard loud and clear at our West of England Live Lab event last week that skills are crucial for unlocking the potential of our regional economy, so it was timely that so much of the Chancellor’s statement focused on this topic.

“There were small concessions towards business rates; an area where the Chancellor had come under pressure in recent weeks. He managed to weather that particular storm whilst making funds available to help those worst affected.

“And there was a nod towards those worried about Making Tax digital, by delaying its introduction to businesses with a turnover lower than the VAT threshold for a year, to April 2019. Thankfully, its adoption will still be mandated and its introduction is still happening.”

Jenny continues: “The South West has the third highest proportion of full time self-employed workers in the UK, according to the ONS, so the Chancellor’s concern about the growing tax gap between those in employment and those self-employed, or using service companies, is particularly significant for our region.

“He has sought to close that gap by increasing the Class 4 National Insurance Contribution (NIC) rate by 1% in 2018 and a further 1% the year after. There will still be a gap between different types of worker – employees will still pay 12. But this isn’t the big shock some see it as – the NIC rate will still be only 2% for earnings of self-employed over £43,000 a year.”

 

 

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