Thank goodness that is over for another year… or is it?
Yes, the Autumn Budget may have come and gone, but the caveat remains that there could be another one next year, if Brexit goes a bit pear-shaped.
How anyone could see Brexit as anything but pear-shaped so far is a moot point, but the chancellor’s largesse on October 29 seemed somewhat at odds with the reality of the UK’s fiscal position.
Philip Hammond, or Fiscal Phil, or Spreadsheet Phil – whichever epithet you prefer – did get a considerable windfall when the Office for Budget Responsibility said borrowing for this year would be around £11.6bn less than expected.
Good stuff: the UK is finally on its way to balancing the books and ending borrowing by 2025 as planned.
Well no, actually. That is not likely to happen now according to the OBR, since ‘profligate Phil’ decided to spend the lot on a variety of tax giveaways that could, if you were so inclined, make you think the government was preparing for a general election.
Unlikely in the short term, with the Brexit negotiations at such a delicate final stage – stability is what is needed. But given the self-serving nature of so many of our politicians, that does not mean it will not happen.
But pushing ‘treats’ – as we were so often reminded given the proximity of the Budget to Halloween – towards key voters just in case will not do any harm.
With any Brexit deal still needing to head through both the EU 27 and parliament, you simply do not know what will happen.
More treats than tricks
That was obviously in the mind of the chancellor when shaping the Budget this year. No tinkering with pensions tax relief, which had been widely expected but was unlikely to happen this time when companies and Britons generally are already being asked to deal with so much fiscal uncertainty. No nasty tax rises on beer or spirits – but if you like a cigarette with a glass of wine, you will be coughing up more to fund it.
Fuel duty was frozen for the ninth year, the living wage is increasing to give a full-time worker an extra £690 a year, and the personal allowance will rise to £12,500 from next April – with the 40 per cent tax bracket starting at £50,000 from the same date.
First-time buyers getting a shared-ownership property valued up to £500,000 will not pay stamp duty, and this will be made retrospective, so anyone who has bought a property on this basis since the last Budget will also gain.
There were cuts of a third in business rates for retailers with a rateable value of £51,000 or less, and a threat of a digital tax on companies (think Google, Facebook, Amazon etc) that make more than £500m a year worldwide, which is expected to make around £400m a year for HM Treasury.