The 2017 Spring Budget is set for Wednesday 8 March. This will in fact be the last Budget announcement to take place in the Spring, as from now on Budgets will feature in the Autumn. The purpose of the Budget announcement is to deliver the financial and economic position of the UK, based on information by the Office for Budget Responsibility, and also present forecasts for spending plans in the year ahead. What can we expect this year?
A Forecasted surplus
January has seen a boost in government revenue thanks to an increased volume of self-assessment tax payments and capital gains tax.
Results show this was the highest surplus in any month of January in 17 years, since 2000.
Whilst January is generally a positive month for government cash flow, due to the influx of tax payments, this super boost could have consequences for the 2017 Budget.
The difference between tax income and government spending was almost 22% lower than in January 2016.
Mr Hammond is looking to be on-target to achieve his aim to reduce the UK’s annual borrowing to £68 billion by March 2017.
Borrowing currently stands at £49.3 billion, the lowest since the same period in 2008.
Where may any surplus be allocated?
The Chancellor is not a man known for political surprises, so there is a chance that he would choose to not do anything drastic if the surplus remains come March 2017.
“There is unlikely to be a significant change of tack by the Chancellor” Howard Archer, chief UK and European economist at IHS Global Insight
There are suggestions that the surplus could be used to help struggling families, which are feeling the pinch of the effects of inflation.
Alternatively, there could be a boost for the much de-motivated NHS, or some easing with regards to the latest news on Business Rate increases.
Keep an eye on our blog for relevant updates in March following the Budget announcement.
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