As anticipated, the Chancellor’s Spring Statement was designed to reassure and instill confidence in the British economy ahead of Brexit.
‘Growth’ was a focus of the Statement. The UK’s economy has grown 0.2% to 1.7%, more than was originally forecast in the Autumn Budget.
Andrew McDaid, Partner at Mitchells Chartered Accountants and Business Advisers commented: “While I applaud the UK’s growth we do have to retain a sense of perspective that it is still a lot lower than other countries in the G20 which puts us in a weaker position particularly in the Brexit trade negotiations.”
Hammond’s only real announcement in the Statement was the bringing forward of the re-evaluation of Business Rates to 2021, a year earlier than planned. He also announced that re-evaluations will now take place every three years rather than every five.
The government has been under mounting pressure to take action on business rates because a revaluation of property in Britain meant companies saw their tax bills more than double from April 2017. More frequent revaluations reflect the rental value of properties more accurately and can help prevent dramatic increases in business rates bills.
The value of commercial property reached an all-time high of £871 billion in 2015. According to the 2016 PIA Property data Report, 55% of commercial property is rented. Businesses in London are also facing a £9bn increase in business rates over the next five years.
Andrew added: “More frequent rate evaluations are designed to stop such dramatic rate increases, which will hopefully make it easier for business to forecast and plan spending.
“The effects of the rates re-evaluation being brought forward and undertaken more frequently, will be felt by all businesses but particularly those in the south, especially London, where property prices have seen dramatic increases in recent years.”
Aside from the rate-evaluation, Philip Hammond used the Spring Statement to remind people about key measures from his Autumn Budget that would go live from 6 April 2018, namely:
- £25m confirmed for first 5G testbeds as part of the govt’s commitment to technology driven growth
- £50m available to employers from next month to help them to roll-out placements for T-Level students
- The £20m construction skills fund designed to fund construction skills villages around the country will open next month for bids
- £80m of funding will be released next month to help small businesses engage
The Spring Statement was also used to allocate the first wave of funding for the government’s £190m Challenge Fund – a fund announced in the Autumn Budget 2017 to deliver full-fibre broadband to homes and businesses across the UK.
Hammond confirmed that the first round would see investment of £95m into 13 regional areas to roll-out superfast connectivity.
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