The scrapped Autumn 19 Budget – the implications for businesses
25th November 2019
It’s been an eventful few years in British politics, but 2019 has been something else all together. The 29 March deadline for the UK to leave the EU was extended to 31 October, and then further delayed until 31 January 2020. Boris Johnson replaced Theresa May as Prime Minister, and Sajid Javid succeeded Philip Hammond as Chancellor of the Exchequer. Uncertainty is a word commonly uttered by businesses as Brexit is yet to be finalised, and as we see the country nearing the second general election in under three years on 12 December. The Budget is a casualty of these unprecedented times.
The Budget, which sets out what the Government intends to spend in the coming year and how it will raise the money to pay for that expenditure usually occurs in October, November or December. It’s been 251 years since a budget hasn’t taken place, so the country finds itself in a highly unusual situation. This usually annual event announces proposed changes to finance bills and fiscal policy in the upcoming tax year, so the lack of Budget in October has left many wondering what changes will actually take place from 6th April 2020.
To add to the uncertainty, The Office for Budget Responsibility (OBR) had also announced its intention to publish the economic forecast as usual, as it is required to do by law twice a year. However, on 7 November, the scheduled publication day, the OBR announced that the Cabinet Secretary had advised it would be in breach of election guidance and so the report was also pulled at the last minute. This decision has been criticised by opposition party Labour – calling for the Chancellor to publish economic forecasts so as to not avoid public scrutiny, ahead of the general election.
What are the implications of a delayed Budget for businesses?
Amid all the uncertainty, things are carrying on as normal for most businesses and their accountants in the run-up to Christmas.
Regardless of the forthcoming election and any developments to resolve the Brexit stalemate, we will still need to file income tax returns and corporation tax returns for 2018/19 on behalf of our clients. One additional point worth noting is that 31 January – a key day in the UK tax calendar – is also the latest scheduled date for the UK to formally leave the European Union in 2020. Unless a further delay is negotiated with the EU, that could make meeting the self-assessment deadline more challenging than normal.
We are always urging clients to complete their tax returns early rather than waiting until the last minute but this year, more than ever, that’s advice worth bearing in mind. HMRC may be exceptionally busy.
And if the UK does leave the EU on 31 January, there will be a raft of new regulations and processes to take into account, especially those involved in exporting or employing staff from the EU.
For further guidance on how to prepare for Brexit, take a look at our Brexit Blog Series.