UK Budget 08 March 2017 - overview

Simmons & Simmons' brief overview of the UK Budget 2017, which was released on 08 March 2017.

Budget overview

Read our detailed commentary and analysis of the UK Budget 2017 in full here

The new Chancellor of the Exchequer, Philip Hammond, is, of course, renowned as something of a safe, if unexciting, pair of hands. Spreadsheet Phil, as he has been called, will, however, be responsible for steering the course of UK fiscal policy through, arguably, its greatest period of uncertainty in many decades, as the UK appears to move towards a potentially controversial “hard” Brexit. In such turbulent times, the skills of a phlegmatic accountant may be much in need, but the Chancellor recognises that other skills will be important too. And there are signs that Philip Hammond would very much like to move beyond the spreadsheet moniker to that of the grand storyteller.

Indeed, bolstered by better than expected Office for Budget Responsibility forecasts, the story the Chancellor wishes to write is that of an adventurous but successful road ahead - with challenges to meet, certainly, but many opportunities to explore too. As we, with some trepidation, turn the page and commence a new chapter of British history post-Brexit, the Chancellor’s message is one of caution but also one which stresses the optimism of new possibilities.

Undoubtedly, of central importance in this unfolding story will be the competitiveness of the UK tax system in attracting and retaining business in the UK. The Chancellor has already committed himself to the reduction of the headline rate of corporation tax to 17% by 2020. Low rates and a wide tax base remain the leitmotiv of the UK’s corporate tax system, with UK taxpaying non-resident companies also likely to find themselves welcomed into the corporation tax fold. For now, however, stability and sticking to the roadmap seem key.

The Chancellor is equally passionate that the story he tells is one that involves compassion and fairness for ordinary working families. Investing in skills and education and addressing the productivity challenge. But also ensuring that the form in which a person engages in business should not significantly affect the amount of tax they pay. Further developments on this perennially knotty problem may well be in the pipeline. The villains of the piece remain tax avoidance and those who promote it and, as usual, these were singled out for special measures.

Overall, however, from a tax perspective, this was a low-key chapter - merely a scene setter for the new main event in the autumn?

Whether, ultimately, the true chronicle of the UK’s exit from the EU is a work of horror or one of boundless adventure (or both?) is yet to be written. If the Chancellor has his way, the tale will be, despite the inevitable twists and turns, an uplifting one in which the Chancellor will himself play no small part. The question at the end of the day, of course, is whether the Chancellor’s tale is a work of pure fiction or one of prescient fact.

Read our detailed commentary and analysis of the UK Budget 2017 in full here