29 Oct 2018 5:30 PM

In what was billed as his last budget before Brexit, Philip Hammond gave way to previous strict financial prudence and delivered a wide ranging package of spending pledges. This was his Budget to mark the end of austerity.

The ability to make such promises was founded on two areas:

  1. That the economy does indeed grow at the newly enhanced expectations of the Office for Budget Responsibility ('OBR'), and
  2. That now is not the time to balance the books, but instead to continue to run a £20billion deficit each year for the long run.

The major tax giveaway that the Chancellor pulled out of his proverbial hat was to bring forward the planned increase in the personal allowance and higher rate threshold by one year to April 2019. It does mean though that there is little scope for future significant tax cuts and, worse, there could be tax rises if, and when, the next global recession raises it's head.

The great 'tax grab' was the further attack on workers in personal service companies where the Chancellor has forecast to raise an extra £1.2 billion a year through increased national insurance payments.

There is, as ever, much detail behind the headlines. The Chancellor made it clear that if we did not achieve a deal for Brexit, he would have to rethink his Budget plans.

If you need advice on how you may be affected by any of the changes announced in yesterday's Budget please contact us.