The Spring Statement 2018 - What does this mean for rural businesses?
14 March 2018
The Chancellor of the Exchequer, Philip Hammond, has delivered the first Spring Statement. As announced last year, there will now only be one Budget per year which will take place in the autumn, with a spending update each spring.
Hammond’s speech was therefore an update on forecasts and spending, whereas tax changes will be announced in the Autumn Budget later this year.
Hammond reinforced his well-rehearsed message of the Conservative Government’s commitment to stabilising the economy by balancing debt reduction and investment, whilst supporting families and vital public services. By championing those who create jobs and wealth, Hammond sees the economy strengthening as we move ever closer to Brexit. He envisages Britain will have an open and outward-looking economy which is ‘confident to compete with the best in the world’.
As the self-proclaimed ‘champions of small businesses and the entrepreneur’ the Tories are set to continue reducing business rates and invest further in work placements and apprenticeships.
Hammond highlighted that the Government could use the tax system to drive behavioural changes to improve the environment. For example, the Government will consider whether tax relief for the non-agricultural use of red diesel contributes to poor air quality. Whilst this example specifically excludes agriculture, it could be interpreted as an indication that the Government may further reward environmentally friendly farming practices through tax relief in the future.
There were only few relevant announcements in the Spring Statement but perhaps more interestingly, the previous day the Housing Minister, Dominic Raab, announced extensions to permitted developments rights. The extensions should allow farmers to build larger new agricultural buildings and convert more houses from existing buildings without the need for a full planning application.
In addition, the MP for West Dorset, Oliver Letwin, is investigating the disparity between planning permissions granted and housing completions with a view to closing the gap and increasing housing supply. A full report is expected in the Autumn Budget and any resulting policy changes could increase incentives and demand for potential development sites. This may well be welcome news for those looking to maximise the use of farm buildings and development opportunities.
Behind the scenes, Inheritance Tax reliefs are also being heavily reviewed. Rumours of changes to Agricultural Property Relief have been rumbling for many years now, but with increasing scrutiny into claims for relief, this Autumn could well be the date changes are announced.