A quiet Budget 2017 will be welcomed by many

Susie Walker

Susie Walker

Partner & Head of Tax

Following the request by the Chancellor to reduce complexity by having the main Budget measures announced in autumn, it is not anticipated that there will be many policy changes introduced during the 2017 Spring Budget. 

For measures to which draft legislation has been published for technical consultation, it is generally expected that there will be little more than a confirmation that the Government intends to include the legislation in the Finance Bill 2017 which will be published on 20 March 2017.

There are several large changes to the corporation tax landscape which businesses are already having to plan for and implement, so a relatively quiet Budget will be welcomed by many.

OBR Updated Forecasts

The Office for Budget Responsibility (OBR) have published revised growth forecasts for GDP growth from 1.4% to 1.6% with public sector net borrowing forecast to reduce by £3bn to £65bn. 

Possible Areas of Policy Change

The increase in commodity pricing due to the relative drop in the value of Sterling could lead to possible reductions in fuel duty and air passenger duty in order to ease the fiscal burden on consumers and businesses.

Existing Areas of Change

There are already several areas of change underway with businesses facing several reporting initiatives in the coming years. These include: -

1. Making Tax Digital

HMRC have recently provided a response to their consultation on Making Tax Digital (MTD) with further consultation on items such as turnover limits coming in the weeks prior to the publication of the Finance Bill 2017.  Businesses have successfully lobbied to provide information using spreadsheet packages but undoubtedly some additional technology will be required to make this work in practice.  Comprehensive testing of the proposed solution has been recognised as required prior to the launching of MDT.

2. OECD Base Erosion and Profit Shifting

Large businesses will have additional reporting requirements under the OECD BEPS project and will often have to undertake a review and document their international business models in respect of transfer pricing which represents an additional reporting burden.

3. Changes to corporation tax in respect of utilisation of tax losses

These changes which have already been announced are estimated to raise an additional £1.8bn annually from April 2017.

4. Research and Development regime

Further details are expected of the review announced in the 2016 Autumn Statement of the R&D regime.

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We'll be watching the Spring Budget announcement on the day and analysing the Budget in full once published.  In the meantime follow our insight on our dedicated Budget Hub