Introducing the Spring Statement
Today the Chancellor, Philip Hammond, unveiled the government’s first ever Spring Statement. Here Emily Coltman FCA, chief accountant to award-winning cloud accounting software FreeAgent, provides a recap on what this brand new event is and considers what today's announcement might mean for your clients.
What is the Spring Statement?
Unlike the complex and comprehensive Budget announcement that we’d normally expect at this time of year, the Spring Statement is simply the government’s response to the updated Office for Budget Responsibility (OBR) forecast.
Why was the Spring Statement introduced?
Back in November 2016 the Chancellor announced the government’s plan to change the Budget timetable in order to “provide more stability and certainty for business owners”.
This included replacing the two “major fiscal events” that were being held each year - the Spring Budget and the Autumn Statement - with a single major Budget event in the autumn for announcing major tax and spending changes. The Spring Statement, by contrast, is designed to be a summary of the state of the economy - although the government has said it will retain the option to announce changes to fiscal policy at the Spring Statement “if the economic circumstances require it”.
What did this year’s Spring Statement cover?
While today’s announcement didn’t include any major tax changes or spending changes, the Chancellor did make some interesting points relating to your small business clients. These included:
- More will be done to reduce late payments for small business owners. This could be a boon to any clients who might be struggling to collect payments from customers.
- The government is consulting on potential changes to the VAT registration threshold mechanism, including allowing businesses a longer period after their turnover crosses the threshold before they have to register, and/or allowing simplified VAT accounting for a certain level above the threshold.
- The government is also seeking views from the public on whether there could be more tax relief available on self-funded work-related training for the self-employed and employees.
Now that the move to a single major fiscal event each year has been completed, we at FreeAgent will be keeping an even closer eye on the Budget when it’s announced in the autumn! We’ll be reporting on the event here as usual, highlighting any major tax or spending changes and what they mean for your freelancer and small business clients.
To find out more about FreeAgent visit their website or call 0800 025 3900.