With a new Budget around the corner and just a few months since the last one, 2017 has been a bumper year for Budgets. Following on from the Spring Budget in March, Wednesday the 22nd of November will see the first ever Autumn Budget; but why has the date of the Budget changed and how will it impact your business?
Emily Coltman from FreeAgent, an online accounting software company, tells you what you need to know.
Two become one
The UK has traditionally made two big financial announcements each year: once at the start of the year with the Spring Budget and once towards the end of the year with the Autumn Statement. This is at odds with other major advanced economies which only have one major financial event each year.
In response to calls from the International Monetary Fund (IMF) and the Confederation of British Industry (CBI) the Chancellor announced in 2016 that the UK would be moving to one major event with a Budget held in the autumn.
This new format will commence from 2018. 2017 has been the transition year, hence the unusual situation of two Budgets in one year.
Introducing the Spring Statement
Spring won’t be completely void of financial announcements, with the introduction of the Spring Statement. Unlike the Autumn Statements of years gone by, however, this should simply be a response to the bi-annual forecast from the Office for Budget Responsibility and shouldn’t contain any major changes to tax legislation. It should be noted that the government has said that it will “retain the option to make changes to fiscal policy at the Spring Statement if the economic circumstances require it”.
What does all this mean for small business owners?
The Autumn Budget will continue to include updates to tax legislation that will be likely to affect small business owners, contractors and freelancers but the announcements of big changes will now happen towards the end of the year. The Spring Statement may prove less significant but it could still serve up news that has an impact for small businesses.
Making Tax Digital (MTD), the government initiative that sets out a bold vision for a digital tax system, is still huge news for small businesses and freelancers so we may even see an update in the Autumn Budget.