Building a future economy: the 2017 budget overview
published on www.youscroll.co.uk
Now is the time that across the land, accountants everywhere are frantically getting all the accounts in order before the start of the new financial year. We expect nothing less from Chancellor Phillip Hammond who oversees the country’s income and expenditure and what a time to be doing this job. The budget review is announced on an uncomfortable back drop of future “Brexit,” ongoing “budget deficit” and the launch of the new Universal credit system. Not lingering on these things, instead the budget is forward looking setting out investment plans on the future skills to grow the economy for the coming generation.
1. Is increasing tax for self-employed workers harming the average working family?
There is a teeny tiny tax loophole where workers on short term and temporary contracts have been allowed to pay tax as if they were a business and this meant paying a reduced amount of tax and national insurance as an individual if they met certain criteria. This has now been closed and those benefits reduced. Finding ways to claim back more tax is something the Government has been looking for but is this the way? Most self-employed and contract workers are not actually big businesses, they are families going to work. Statistics that show people claiming job seekers allowance going down show that these same people are re-registering as self-employed. This therefore doesn’t address the tax evaders, what about big businesses with offshore accounts?
2. More money for adult social care addresses aging population
The government have acknowledged that there is an aging population and that the baby boomer generation are all set to retire if not already and there wasn’t enough money to pay for all their care. Now £2billion has been set aside to spend in adult social care over the next 3 years which should ease pressure on the NHS. In addition to this, £100 million is being invested in accident and emergency over the next 2 years. This doesn’t seem enough considering how many people there are in the country. The budget balancing between local authority, health and social care and NHS seems set to continue.
3. There is a focus on building the future industries and training the next generation
The other baby boom has been acknowledged and will get the chance to train into the new industry growth sectors so that they can do those jobs. New “T-Levels” for 16-19 year olds will be introduced in autumn 2019 which allows new routes for construction, digital and agriculture careers. For all those that remember the turning of the millennium – year 2k was when most of the country wanted a millennium baby – now they are leaving school and looking for work. Funding skills and training for future industry hopefully will support them and not leave us with more young people not in education, employment or training (NEET).
4. Childcare funded but is it worth it yet?
Working parents get more hours’ childcare tax free or free if the child is aged 3 – 4. With the cost of private early years childcare for working parents often greater than monthly rent costs, the 30 hours of nursery time free per week may make it easier for families to feel the benefit if working.
5. More money in your pocket if you can find a job
Raising the tax threshold to £11,500 per annum means that everyone who works now gets more money in their pocket before they pay tax. Getting people back to work and making work worth doing is great but what about those that cannot work? As we are all quite aware, Conservatives are not always up-front about who they think is “fit to work.” Another issue is whether the increased income balances against the increase in living costs. More money means less tax credits, less housing benefits and at a time of record rent prices families may be at risk. We can only look forward to the investment in small business, digital infrastructure and in training young people with a hope that the economy will grow as a result.
6. Funding for domestic violence
Funding for domestic violence charities that supported victims and families at risk was greatly reduced over the last few years and this budget has recognised a need to have services available for victims of domestic violence and for people in need. This is welcoming for the Chancellor’s budget launched on international women’s day. At least there is something hopeful.