Today, Philip Hammond delivered the Spring Statement 2018.
The statement was light on concrete proposals, but it did contain some measures that will impact small businesses and the self-employed. Here, we’ve put together the key points you need to understand.
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Growth and borrowing forecasts
Economic growth forecasts for 2018 were revised up to 1.5 per cent, from 1.4 per cent in previous estimates. It is expected to be 1.3 per cent in 2019 and 2020, 1.4 per cent in 2021, and 1.5 per cent in 2022 – lower than the previous forecasts set in November.
Borrowing is forecast to be 2.2 per cent of GDP in 2017-18, or £45.2 billion – down by £4.7 billion on previous estimates. The Chancellor called this “a turning point in the nation’s recovery.”
There were few concrete announcements for spending in today’s Spring Statement. Instead, the Chancellor said that a full spending review would be conducted in 2019, and that public spending would increase if the economy continued on the same path.
Small business jobs
Philip Hammond announced two key measures to increase productivity, both of which may impact small businesses. The first is an extra £500 million for T-levels, the new qualifications designed in part by industry leaders, plus £50 million to help employers build placements for T-level students.
In addition, the Chancellor announced £80 million to support specifically small businesses taking on apprentices.
The Chancellor said that the government will take action on the culture of late payment, along with broad measures to increase small business productivity. IPSE welcomed the move on late payment, suggesting that it will help the very smallest firms, as the average freelancer now spends approximately 20 days per year chasing invoices.
In an important move for small businesses with premises, the Chancellor announced that the next business rates revaluation will be brought forward to 2021, having previously been scheduled for 2022. Business rates have been a point of contention since the last revaluation. However, the government now intends to conduct a revaluation every three years, in order to minimise the shock felt by businesses each time rates are reset.
As part of the previously announced £190 million fund, the Chancellor announced the first wave of funding allocation for high-speed broadband rollout. Around £95 million will be spent on digital connectivity in 13 areas across the UK.
As the UK moves away from cash and towards card or contactless payments, the government has announced a consultation on the use of cash in the future, and on ensuring that those who need to use cash are able to continue doing so.
What do you think of the Spring Statement 2018? Is it good for small businesses? Let us know in the comments.