Autumn Budget 2017 explained
What the changes could mean for your business
Make sense of the measures announced in the Chancellor’s Budget – and how they could impact your business – with our summary.
The Chancellor has delivered his Autumn Budget, and there were a host of important announcements for UK businesses.
Our experts have analysed the measures and provided their thoughts on some significant ways they could affect businesses across the country.
Adam Rowse, Head of Business Banking, Barclays:
The Chancellor’s Autumn Budget could have led to many businesses having mixed feelings as they digested the announcements. Headline-grabbing downgrades to economic growth forecasts may cause some legitimate concern, but alongside these were a series of confidence-boosting measures that show a desire to support growing businesses and boost crucial infrastructure.
And with that in mind it was great to see policies announced to tackle sluggish productivity – which has been something of a hot topic recently.
Plenty of businesses will welcome the move to bring forward – by 2 years – the linking of business rate increases to the Consumer Prices Index rather than the current Retail Prices Index. Rate revaluations every 3 years, instead of the current 5, will help bring more stability, and the move to end the ‘staircase’ tax will be a big relief for lots of businesses.
Also very welcome is the Action Plan to unlock more than £20bn in patient capital investment in scale-up businesses. This includes a new fund through the British Business Bank seeded with £2.5bn in public money. We need small companies to invest in themselves to boost productivity, and it’s great that the government is giving them this vital support.
And there was a lot more support for business. The National Productivity Investment Fund is being expanded to £31bn from £23bn (and will run for an extra year to 2022/23), while the government eased concerns by saying it would replace European Investment Fund lending if needed. The Enterprise Finance Guarantee will also be extended to March 2022 and expanded to support up to £500m of loans a year. Across these initiatives it’s great to see the government investing in areas that will not only support employment but also help businesses gain access to crucial funding.
Elsewhere, the decision to maintain the VAT threshold for 2 years will come as a relief, although there is a plan to consult on the design of the policy. The exemption for vans from new measures to tax diesel owners more heavily recognises the importance of small traders up and down the country.
And it was great to see backing for housebuilders. There’ll be at least £44bn in funding, loans and guarantees to support the housing market over the next 5 years, including an extra £1.5bn for the Home Builders Fund, which provides loans for SME housebuilders struggling to get finance.
Naturally, there were also some announcements that may be less warmly received. An above inflation rise of 4.4% in the National Living Wage, paid to workers aged 25 and over, to £7.83 an hour could add pressure to some businesses. With this in mind, ways to find business efficiency will be on the agenda in 2018.
But overall, the government has delivered a budget that should hopefully give businesses some clarity and certainty, and help them to take advantage of the growth opportunities available to them.
Juliet Rogan, Head of High Growth and Entrepreneurs, Barclays:
This was a very high-growth focused budget, with some important announcements that should help the sector to continue to flourish.
One of the most pleasing was the Action Plan for scale-up businesses. As well as this, there are changes to the Enterprise Investment Scheme (EIS). The annual allowance for people investing in these schemes is being doubled, as is the annual investment that qualifying businesses can receive from these funds and the Venture Capital Trust scheme.
The impact from this will be great. It will mean there’s more liquidity available to fund growth. The level of investment has already gone up this year, and I think the availability of this kind of capital will massively enhance competitiveness.
There was also a strong commitment for research and development, with the government allocating a further £2.3bn and spending £500m on initiatives including artificial intelligence, 5G and fibre broadband. What was good to see was a commitment to education, too. A National Retraining Scheme will focus on developing digital skills, along with supporting the construction sector, and will help equip people with the skills they need to be successful in an innovative society.
So it’s been a positive budget, and very reassuring, too. It shows a commitment to maintaining the momentum we have as one of the leading countries in Europe for fast-growth businesses.
Mark Suthern, National Head of Agriculture, Barclays
Our early reflections indicate no specific announcements directly for Agriculture, even though some in the industry were hoping for specific measures to help give more clarity for farmers beyond 2019.
However, some of the government’s longer-term plans could bear fruit for the industry in indirect ways.
For example, the push for driverless cars could pave the way for legislation to allow driverless tractors, which may help with productivity and efficiency gains. In fact, driverless vehicles in general could bring costs down across the supply chain, giving farmers and growers more flexibility to take advantage of investment opportunities.
The infrastructure investment plans, including improved transport links, could help farmers with niche products – and add value to primary products – by creating easier access to markets.
And the drive to support housebuilding may well help farmers, especially the consultation on speeding up the time taken between the granting of planning permission and the actual building. This could help farmers who want to capitalise on their location and release assets. The capital they get in return could then give them greater flexibility in forward planning for their business.
Ian Workman, Co-Head of SME Business Relationships, Barclays
There were several announcements in the Autumn Budget that will be particularly significant for businesses around the country, not least a new £1.7bn Transforming Cities Fund designed to improve transport connectivity and support jobs across English cities. This will clearly help businesses by delivering much-needed improvements to infrastructure.
Other infrastructure spending includes, for example, £300m to make sure rail improvements in the Northern Powerhouse and Midlands Engine can be accommodated by HS2 infrastructure. A further £30m will be spent to trial new solutions to crucial mobile and digital connectivity for trains on the TransPennine route.
The Chancellor also announced that the Scottish government will get £2bn more in funding, there’ll be £1.2bn more for the Welsh Government, and a Northern Ireland Executive will get over £650m more. As you’d expect, we’ll continue to support businesses in these areas.
Manchester, meanwhile, is to get a local industrial strategy. There is also another devolution deal for the West Midlands and a new devolution deal with North of the Tyne. The government also committed £337m to replace 40-year-old rolling stock on the Tyne and Wear Metro.
And the Cambridge – Milton Keynes – Oxford corridor is being supported by a commitment to build 1m homes by 2050 and the transport infrastructure to go with them. This investment is crucial if it is to live up to its potential as a powerful growth engine of the future.
All of these projects will, eventually, be a boost for businesses, but it has to be acknowledged that they come alongside reduced economic forecasts and these may well dampen enthusiasm in the short term.
The effects of tax rules will depend on individual circumstances and are subject to change. Barclays is not a tax adviser and does not provide specific tax advice.
You may also be interested in
Switching to Barclays
We'll take care of your bank account switch
Our Current Account Switch Service lets you move your account from your bank or building society to us in a simple, reliable and hassle-free way.
SmartBusiness Dashboard and apps
Your business on one page
See your most important business and banking information at a glance – free with SmartBusiness Dashboard.
10 tips on becoming an exporter
Discover some top tips for exporting – and find out where to get expert advice.
Are you ready for anything?
Read our latest report to learn how you can include resilience planning in your business’ day-to-day activities.