Phillip Hammond will stand up on Wednesday to deliver his first statement speech as the new tory chancellor. So, what can we expect as the first major speech he will deliver in the job? Reportedly he will leave more of the policy announcements to his colleagues but will cover the broad direction of what will be expected. Much of the announcement will figure around the big event of the summer – Brexit and the deficit the country has. Mr Hammond admitted himself “We still have a significant deficit in this country. We have to prepare for the economy for the period that lies ahead. We have to make sure the economy is watertight.”
- Family Support - Help for families that are struggling to make ends meet are likely to be high on his list of priorities. Additional childcare subsidies and extending further support to the working parents of children up to the age of 2.
- Infrastructure - Infrastructure spending to improve road and rail networks also highlighting specific projects to be undertaken such as an expressway connecting Oxford, Milton Keynes and Cambridge. This is likely to be a major plus for contractors across all sectors.
- Brexit - Reassurances surrounding Brexit. With the UK preparing to leave the EU the chancellor will look to provide some reassurance to businesses of all sizes across the country. Mr Hammond recently wrote “being a former businessman, I know how companies crave stability and certainty above virtually anything else”.
- Public Sector Reform - Following on from the IR35 public sector reform consultation, first published in May of this year, many limited company contractors will be waiting with bated breath as to how the reforms will be implemented. There is a suggestion that the reforms will be delayed and possibly suspended altogether. Most PSCs will want some form of clarity with the hope that the government has taken on board some of the feedback given in response to the consultation.
- VAT - The idea of a temporary VAT cut from 20% currently to 17.5% has been suggested and this is a possibility for the spring budget in 2017.
- Corporation Tax - Mr Hammond has indicated that there won’t be a drop in corporation tax to 15% following Brexit. Mr Hammond’s predecessor George Osbourne had set out a plan to drop corporation tax to 17% by 2020 and it looks likely that the new chancellor will continue with the current plan.
The statement on Wednesday will be a yardstick as to the thoughts of the new chancellor’s direction for small businesses and enterprise. We will be tweeting live on Wednesday the 21st, so feel free to join us and ask any questions.