With the Autumn Statement rapidly approaching, all eyes are fixed on the new Chancellor, Philip Hammond, in anticipation of his first major economic statement. Here, we outline some of the changes that businesses may be expecting.
The Chancellor is expected to use his inaugural Autumn Statement to outline plans to significantly increase spending on infrastructure, in an effort to boost the UK economy following the Brexit vote.
In its Autumn Statement submission, the British Chambers of Commerce (BCC) has urged the Chancellor to 'improve infrastructure' by investing directly in 'quick-start' projects, such as housing and broadband. Previously, the Chancellor announced the introduction of a new house building policy to help finance the construction of new and affordable homes.
The Government recently stated that it is 'committed to delivering the high-quality infrastructure needed to sustain a more competitive and productive economy that works for everyone'.
With this in mind, the Chancellor has announced that the National Infrastructure Commission is to become an agency geared towards planning and prioritising efficient infrastructure investment. The Commission is set to come into force in January 2017.
Commenting on the news, Mr Hammond stated: 'It will independently define our long-term infrastructure needs and help prioritise, plan and ensure value for money as this investment creates a modern Britain - fit to take on the world.'
Many expect the Chancellor to announce a significant shift in economic policy, with the Government predicted to distance itself from quantitative easing, favouring a fiscal approach that incorporates tax and spending in its place.
Commenting on monetary policy, the Prime Minister recently stated: 'People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer. A change has got to come. And we are going to deliver it.'
In a recent open letter to the Chancellor, a handful of business and lobby groups, including the Institute for Fiscal Studies, called on the Government to 'overhaul the way tax policy is made in the UK'.
The organisations urged the Chancellor to establish clear guiding principles and priorities for the UK's tax system, and called for the Government to return to a single annual fiscal event, preventing Autumn Statements from becoming 'second Budgets'.
The letter also included requests for the consultation process for tax changes to begin at an earlier stage and for the 'roadmap' approach to taxation to be extended, along with calls to 'prepare the ground' for future policy changes through external reviews.
Meanwhile, the Institute of Chartered Accountants in England and Wales (ICAEW) has combined forces with 12 other organisations to create a Small Business Taskforce, designed to enable SMEs to thrive in the post-Brexit economy.
The new taskforce has urged the Government to protect exports and 'allow a flexible workforce'. Echoing the call made by the BCC for the Chancellor to avoid introducing input taxes or other significant costs on businesses for the remainder of this Parliament, the Small Business Taskforce also urged Mr Hammond not to introduce new taxes 'without proper consultation' once the UK has exited the EU.
No matter what is announced in the Chancellor's upcoming Statement, as your accountants we can advise on how the changes may affect your business and personal finances. Please contact us for advice tailored to your individual requirements.