Initial post Budget comment seems to have focused on the abolition of stamp duty land tax for first time buyers on homes up to £300,000. Whilst undoubtedly this is more than welcome for those looking to get on the property ladder, will it make buying your first home more achievable? Perhaps not – why? For most the challenge seems to be more about the ability to earn enough to service a mortgage rather than to buy a property. Therein lies the message to take away from the first Budget since the general election.
We did however hear from the Chancellor a vision for a vibrant and dynamic world class Britain post Brexit, an economy which leads in terms of innovation, productivity and skills and that is a great place to live and work. It is therefore not surprising to have heard announcements that included a widening of the tax relief for businesses in terms of research and development (R&D), along with increased scope for investment in digital and technology through use of the Enterprise Investment Scheme (EIS). Certainly for the workforce of the future there was a vision for a highly skilled and highly paid workforce. To achieve this though may require greater investment in terms of addressing the skills gap in our workforce, whether it is for those leaving school and entering tertiary education or an aging workforce that needs to re-train.
Even pre Brexit, the UK with an aging population and increasing job vacancies, was experiencing workforce shortages. Post Brexit it seems addressing or filling the gap has become even more challenging. Whilst incentives and support in terms of developing and using new labour saving or replacing technologies may help address this issue in part, more needs to be done to ensure we are training and developing the workforce of the future. Ideally an approach which focuses more on increasing the value workers generate and therefore the earning they receive – a move which could help to ensure more people can afford to buy their first house.
The good news for many must be the continued freeze of the fuel tax escalator and the excise on perhaps your favour tipple as we approach Christmas. For the vast number of diesel powered car drivers though there was a shot across the bows with an increase in vehicle excise duty aimed at encouraging us to move to more environmentally friendly vehicles.
For house builders the Chancellor’s efforts to address the barriers to building enough houses each year must be welcome, whilst funding and public sector spending is helping this to come about, realising the vision of building 300,000 houses a year by 2020 might be a big ask.
Whilst perhaps a bit of non news, the accountancy profession welcomes the deferral of the intent to look at the VAT threshold. With Making Tax Digital (MTD) for VAT purposes coming into effect in April 2019, it seems more than timely to leave any thoughts of looking at VAT thresholds until then.
In terms of public spending we surely must welcome any increase in spending for our NHS, and infrastructure projects which benefit other areas of the country and not just London and the South East.
Should we have expected more from the Chancellor? Perhaps not, he seems to have been consistent with his message and direction of travel, re-affirming the steady and sustained course of action for ensuring the economic stability and sustainability for the UK.