Chancellor of the Exchequer George Osborne has announced that he is to deliver an ‘emergency’ Budget (also referred to as a summer Budget) on July 8 2015, just four months after Budget 2015 was delivered on 18 March 2015 ahead of the recent general election.
Though it may seem unusual to deliver two budgets in a year, Mr. Osborne’s very first Budget was also an emergency Budget, taking place directly after the Conservative and Liberal Democrat coalition was formed in 2010.
Why Hold an Emergency Budget
Next month’s emergency budget is taking place because the policies announced and elaborated upon in the last budget, on 18 March, were created by a coalition Government; not the Conservatives alone.
With the Conservatives winning an overall majority at the general election on 7 May, it became clear with the announcement of the emergency budget that the Tories now wish to declare their own policies, without any pressure from (or consolations for) the Liberal Democrats.
What to Expect
Though the Chancellor has already stated that the focus of next month’s emergency budget will be to turn the Conservatives election promises into a reality by focusing on delivering on the commitments they made to working people at Budget 2015, if you’re a small or medium-sized business (SME) owner there won’t be a shortage of things to listen out for during July’s emergency Budget
It’s being reported across many sources that George Osborne will use his platform at the emergency Budget to speak of the country’s latest economic growth forecasts (with a focus, as always, on economic recovery), alongside taking the time to outline further the Government’s plans, as laid out in the Conservative Party’s manifesto prior to the general election, to:
- Provide spending cuts and reforms to individual welfare (reducing the Welfare bill by £12 billion a year) and pensions, as we detailed in our recent summary of the pension reforms,
- Prevent rises in Income Tax, Value Added Tax (VAT), and National Insurance; a direct benefit to small business owners,
- Increase the tax-free personal allowance amount to £11,000 in April 2017, and increase the higher-rate tax threshold,
- Increase the Inheritance Tax threshold on homes to £1 million by 2017.
Although it’s unclear whether it will receive a mention during the emergency Budget itself, SME owners are encouraged to keep an eye on any developments surrounding the in-out European Union (EU) Referendum, which is currently scheduled to take place before the end of 2017. An ‘out’ vote (or further stalling on when a vote should take place) has the power to affect your business even if you don’t currently trade in or with other countries within the European Union.
Experienced SME Accountants
To speak with a professional to discuss how the emergency Budget could affect your business, or for any other reason, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.