Earlier today, Chancellor Philip Hammond appeared on the steps of Number 10 Downing street with that all-too-familiar red box in hand, ready to present the UK with a budget for the months ahead.
Whilst Hammond’s budget may have sparked a lot of talk about stamp duty and the price of a pint among the average man and woman on the street, for those of us in the construction industry, there was a lot of news to take in.
Here, we round up the key points from this November’s budget and explain what this really means for the UK’s thousands of tradesmen.
There was as much bad news flying out of Hammond’s famous red box as there was good news, so let’s get the bad stuff out of the way first shall we?
Without giving us any real indication as to why, the Chancellor did reveal that economic growth will slow down over the next several years, with a reduction of 5% (to 1.5%) expected. For the next three years, GDP forecasts are set at 1.4%, 1.5% and 1.6% respectively, down from the 1.6%, 1.7%, and 1.9% forecast this past spring.
Meanwhile, debt was expected to reach peak levels of 86.5%.
Whilst the state of the economy itself may make it tough for independent tradesmen to flourish over the coming months (if not years), there is some hope in the form of reduced business rates and higher personal tax thresholds.
Business rates rise
At the last budget in March, business rates were set to rise, particularly in bigger cities. That may have put the kibosh on many a contractor’s plans to expand their business, but there is at least hope on the horizon.
The Chancellor announced plans to switch to CPI, which will lead to a rates reduction of around 1%.
On a similar note, VAT registration has been frozen at £85,000 until at least 2020, which is likely to prove hugely beneficial for the UK’s tradesmen and small business owners.
Personal taxation levels rise
Elsewhere, there’s plenty of reasons to be cheerful with the news that personal taxation allowance will rise to £11,850, meaning all that hard work you’re doing will result in more money in your pocket and less in the country’s coffers.
The threshold for higher tax rates has also been increased. From April, you won’t have to pay the higher, 40% tax rate until you’re earning over £46,350 –a decent rise from the current rate of £45,000.
More investment in new homes…
Of course, all that extra money is only good if there’s enough work available to earn it in the first place, which is why you may be glad to know that Hammond has promised more investment in the creation of new homes over the next few years.
Measures include financial support for new housing totalling £44 billion, and a promise to free up more land for housing developments.
Not content with just that, the Chancellor also vowed to ‘unstick’ the completion of over 40,000 homes with a further £630 million investment, meaning those in the industry could well see themselves kept plenty business over the course of 2018.
… and in new skills
Having all those extra homes to work on may well mean bringing in extra help, but what happens when there’s a skills shortage and you can’t find trained, qualified sub-contractors to bring on board?
Simple – you get the Chancellor to promise a serious investment in skills funding for the construction industry, which is exactly what he did in the Autumn 2017 budget.
A total of £204 million has been set aside to train the next generation of tradesmen, with specialist programmes for building new homes and an improvement on existing training schemes.
All in all then, whilst it’s fair to say that not everyone comes off rosy as a result of Philip Hammond’s latest budget, the future does seem bright for the country’s hardworking tradesmen and construction businesses.
How does the Autumn 2017 budget affect your business? What challenges do you anticipate over the coming months? Let us know in the comments below, or by joining in the discussion on Facebook and Twitter.