Hang onto your hats: the Budget is just around the corner! Got a case of déjà vu? Thanks to a change announced last year, 2017 has transpired to be a bumper year for Budgets. We had the final Spring Budget back in March and now the first Autumn Budget is due on Wednesday 22nd November. Confused? Don’t worry – here’s what you need to know about the change.
2017: a tale of two Budgets
Traditionally, the government has issued two sets of big changes to financial legislation each year: once in the Spring Budget and once in the Autumn Statement. This has made the UK the only major advanced economy in the world to make two major changes a year to its tax system.
In response to calls from bodies such as the International Monetary Fund (IMF) and the Confederation of British Industry (CBI) to address the uncertainty created by this system, the Chancellor announced in 2016 that the UK would move to a single fiscal event a year – a Budget held in the autumn – starting from 2018.
In order to make the transition, both the final Spring Budget of the new system and the first Autumn Budget of the new system are being held in 2017, resulting in the very unusual situation of the UK having two Budgets in one year!
2018: enter the Spring Statement
From 2018 onwards, the Budget will be held in the autumn – but there will still be an event in the spring: the Spring Statement. Unlike the Autumn Statement of previous years, this should simply be a response to the bi-annual forecast from the Office for Budget Responsibility and shouldn’t include any major changes to tax legislation. However, it’s worth noting that the government has said it will “retain the option to make changes to fiscal policy at the Spring Statement if the economic circumstances require it”.
What does all this mean for small business owners?
The Budget will continue to include updates to tax legislation that may affect small business owners and contractors. While the Spring Statement from 2018 onwards may prove less significant, it could still serve up news that has an impact on the self-employment sector. Here at FreeAgent, we’ll continue to report on any legislative changes that affect small business owners and contractors and will be publishing our response to next Wednesday’s Budget announcement here on our blog.
Autumn Statement to Autumn Budget – a timeline
|8 March 2017||Final Spring Budget was announced|
|22nd November 2017||First Autumn Budget will be announced|
|Spring 2018||First Spring Statement will be announced|
|Autumn 2018||Second Autumn Budget will be announced|