Business Overview: Autumn Budget 2017

I was privileged to be a guest in the public gallery at the House of Commons when Chancellor Philip Hammond presented the Autumn Budget 2017. Mr Hammond certainly set an optimistic tone, and the packed gallery seemed to enjoy not only the substance of his speech, but also his fairly light-hearted delivery – interspersed with some clever off-the-cuff jokes.

As for the substance … the main thing I was interested in was to digest what the latest budget means for the welfare of small businesses and the self-employed, who make up the bulk of our clientele here at Dentons. It seems that business in general have welcomed the Budget announcements and promises, such as the potential scrapping of the “staircase tax”, affecting tens of thousands of commercial properties.

Other key announcements included the fact that the British Business Bank will get a boost in funds to unlock £13-billion to fund UK SMEs. There’s also to be an extensive and exciting focus on national retraining schemes for digital skills and construction, and an expansion in investment in scalable tech business.

Let’s take a snapshot of the overall economic outlook for the UK as per Mr Hammond’s budget:

  • The growth forecast has been cut by half a percentage point (from 2% to 1.5%)
  • The annual Consumer Price Index (CPI) rate is forecast to fall to 2% within a year
  • GDP forecasts have been cut incrementally for the years to come, to 1.4%, 1.3% and then 1.5% going forward
  • Borrowing is forecast to fall from this year
  • Debt will peak at 86.5% of GDP this year, before falling in following years

When it comes to personal tax, Mr Hammond increased the tax-free personal allowance to £11,850 from April 2018, and increased the threshold at which taxpayers pay the higher rate to £46,350.


For business, Mr Hammond announced a freeze on the VAT threshold of £85,000 for at least two years.

Business rates could be reduced around one percent because they are to be indexed to CPI from next year, instead of the higher retail price index. He revealed business rates raised £30-billion in 2016-17.

Rateable values are now to be recalculated every three years instead of every five, which should mean rises will be more gradual.

We’re all interested in the survival of local pubs, so most were smiling when the Chancellor announced extending the £1,000 rates discount for our watering holes  that have a rateable value of under £100,000 for a further year – but perhaps he could have been more generous?

There is also to be some R&D tax relief, in the form of an increase in the main R&D tax credit rate to 12%. The government has set aside £2.3 billion for investment in R&D.

As anticipated, excise duty of older diesel cars will increase from next April, but “white van owners” can relax – such vehicles will be exempt. There’ll also be no fuel duty rise next April as originally planned.

The 4.4% increase in the national living wage to £7.83 from next April came as no surprise, but there were some positive announcements about investment in infrastructure that should be helpful to business.

These include a £500-million fund for 5G mobile and fibre broadband, and £1.7 billion for city transport. Electric cars received a push with a further £540million investment promised to get them charged up.

So, that’s the essence of what appears to be a balanced budget. Find us on Facebook or Twitter if you’d like to comment.