The Spring Statement 2019
Whilst disaster and infighting appear to have gripped Westminster, and it’s hard to recall a time when our politics appears more desperate, one could be forgiven for forgetting that the British economy remains in strikingly good health.
Blink and you may have missed the recent Spring Statement, the Chancellor’s mini-budget (or economic update) that fills the void until the annual budget of the Autumn. It was trailed as having extra billions of offer if parliamentarians were willing to approve the Government’s EU withdrawal bill; a sweetener on offer to end the Brexit melodrama.
Yet whilst Britain has a Chancellor who has been expecting calamity ever since the 2016 referendum, the UK’s economic fundamentals remain essentially sound. Britain continues to see a record number of people in work, household spending is at an all-time-high, and salaries are rising at their fastest rate in ten years. Our budget deficit is also at its lowest level since 2003, largely a result of the Treasury’s record tax take.
There is of course a cost impact of the unresolved Brexit matter dragging on endlessly, but once a future path is agreed markets can and will be expected to rally. And whilst the Brexit shenanigans have no doubt inhibited growth and businesses are waiting to see how (and where) the land lies post 29th March, the OBR is still forecasting UK economic growth this year of 1.2%, matching that of France and Germany.
Business owners will be have been interested to note that the Chancellor did not give in to pressure to delay Making Tax Digital (‘MTD’) for VAT. However, MTD for other taxes will not be introduced until the transition to MTD for VAT has been bedded in.
The Chancellor also used the Spring Statement to announce a number of consultations that will be published during 2019. Most notably these will include: preventing abuse of R&D tax relief for SMEs; CGT private residence relief, a consultation on the changes to lettings relief; and a consultation on the potential restriction of the amount of carry forward capital losses a company can offset.
Blog written by Elliot ArwasTalk to Barnes Roffe today