|Hammond and May - Image originally appeared in InAuto News|
In a week that has seen Hammond and May for the first time on Amazon Prime video, the stage was set for an equally dramatic introduction – our new team’s first Autumn Statement!
When she stood outside Number 10 as our new Prime Minister, Mrs May promised Government policies that would help those who are “just about managing” and what emerged from Number 11 definitely showed some signs of that.
The popular headlines: Living Wage up, tax and NIC thresholds up, petrol duty frozen. Then there is the change to the taper on Universal Tax credit changes so that families keep more of their credits as their income rises and the money that will be invested in building affordable homes and improving transport systems, which will additionally help to secure jobs in the long downtrodden construction industry.
It painted a picture of the UK as a good place to live and definitely open for business, confirming the cuts in the rates of corporation tax and promising more funding to Universities and for R&D. Indeed, more cash will be available to finance everything from innovative businesses, via the British Business Bank, to improved mobile phone networks and internet infrastructure.
So, was it all good news from Hammond’s first rifle though the red dispatch boxes?
To be fair, he was somewhat constrained by his predecessor’s previous decisions, by the Office for Budget Responsibility’s rather downbeat assessment of future economic performance and the ongoing lack of cash in the Government’s coffers.
But, no, not if you own a home or a car because you’ll be paying more for your insurance. Not if you’re a landlord that will have to carry the costs of proving that your tenants are credit worthy and entitled to live in the UK. Not if you’re an employer that will have to work out how to recover the rise in the Living Wage and the extra NIC costs of stopping employees giving up salary in return for benefits (except eco-friendly cars), as well as price rises on pretty much everything you buy as other employers to factor them in to their prices. And if your business ends up struggling as a result of this, to add insult to injury you’ll now have to pay NICs on some redundancy payments.
To appease the nay-sayers in the British media who believe that big businesses (especially foreign ones) create losses just to avoid paying tax, the ability to offset tax losses against future profits will be restricted if those profits are more than £5m and the amount of interest over £2m that can be deducted will be limited. Some might think it an interesting way to incentivise generating profits in the UK.
Chancellors have to work hard to find proverbial rabbits to pull from their hats in the Autumn. The best Mr Hammond could do was make it an event that announced its own demise - his major surprise was the news that there will be no more Autumn Statements!
“And”, as Jeremy Clarkson might (now) say “on THAT terrible disappointment….”
This article was printed on December 5th in Huddersfield Examiner Kirklees Business News on page 14 - Titled Hammond and May