The Spring Budget 2017 will be announced on 8 March at around midday – but here’s an advanced prediction of some likely business-related inclusions.
One of the more interesting predictions is that Hammond will put some pressure on businesses leveraging a subscription-based revenue stream to prove “traps” are not being laid.
Major growth stories such as Netflix and Amazon have been able to expand at such impressive rates by encouraging customers to part with what is often viewed as a nominal amount each month. However, price hikes and hidden charges often make this figure larger than expected – and the government wants to do something about it.
Energy firms are also being bundled into this argument, with many believing rates imposed by utilises companies are confusing and hard to change.
Then there is the finding that Citizens Advice believes there are two million consumers each year experiencing problems with cancelling subscriptions – whether they be a gym membership, music streaming or that ever-popular Amazon Prime subscription.
With the recalculation of business rates now less than a month away, expect business rates to figure highly in Hammond’s address to parliament.
Much has been written in the previous months and weeks about how ill-prepared and un-informed businesses around the UK are about the upcoming amendments.
One area Hammond is likely to touch on is increased support for the nation’s smallest firms – those that will feel the pinch more when rates go up in business hotspots like London.
Organisations such as the British Retail Consortium have said that “tougher times” for the retail sector ahead will exacerbate the impact a rise in business rates will have. If Hammond does not address this big issue, expect significant blowback in the aftermath.
As we have been tirelessly covering in our Real Business Broadband section, connectivity around the UK is still miles away from where it should be. Rural businesses in particular are having to tolerate substandard speed and reliability.
Multiple sources believe small business broadband vouchers of up to £3,000 will be made available in the Spring Budget 2017, with the expectation being companies can club together and spend vouchers as a collective. This would incentivise major telcos like BT and Virgin Media to install higher-spec broadband in underserved areas.
Initiatives such as Virgin Media’ Project Lightning have set in place plans to make sure there are no corners of the UK which do not have access to super fast broadband, but the application of such schemes is proving too slow for many companies.
As companies such as Deliveroo and Uber continue to offer options to the UK’s growing army of self-employed workers, there is a consensus that the government must provide tighter legislation to both protect these workers from exploitation and make sure businesses can obtain some kind of consistency.
A landmark case involving Pimlico Plumbers, a business set up by regular Real Business columnist Charlie Mullins, saw one employee win the right to be called a “worker” – rather than a self-employed “independent contractor”.
Matthew Taylor, a man who headed up Number 10’s policy unit under Tony Blair, has been tasked with producing a report on modern working practices – and we can expect some of these findings to work their way into Hammond’s Spring Budget 2017 speech.
Making Tax Digital
As one of the Conservative’s hallmark polices, Making Tax Digital is a move to take a company’s tax flings online and reduce the burden associated with end of year reporting.
However, despite first being announced in 2015 and not yet rolled out until April 2018, many camps still feel it is being rushed in too quickly and will cause more damage than good in its infancy.
One of the chief concerns has been the cost small businesses in particular will have to absorb when Making Tax Digital becomes law.
Hammond and his Spring Budget 2017 dossier will be under pressure to provide some clarity and assistance with Making Tax Digital.
Back in November, when Hammond made his Autumn Statement address, he said the Treasury would be reviewing the tax environment for research and development (R&D).
While lots of financial assistance out there, the detail of it is often hard to understand for companies. Questions like what does qualifying research look like and how long can tax relief be sought need answering.
Then there is the rallying call for R&D tax help to not just be confined to things you can touch, but also be available in booming areas such as financial technology.
If Hammond is to continue encouraging innovation in the UK, his Spring Budget 2017 will need to include some words on R&D.