Some good news in Bud­get for NI pre-brexit

Belfast Telegraph - Business Telegraph - - News - Bypeter­legge, Part­ner, Tax @grant­thorn­tonni

Chan­cel­lor ‘Fis­cal Phil’ Ham­mond last Mon­day an­nounced the fi­nal Bud­get be­fore the next big ‘B’ day, Brexit, on March 29, 2019. Wor­ry­ingly, the Of­fice for Bud­get Re­spon­si­bil­ity (OBR) is­sued a strong state­ment that “there re­mains no mean­ing­ful ba­sis on which to pre­dict the out­come of cur­rent ne­go­ti­a­tions over the re­la­tion­ship be­tween the UK and EU af­ter Brexit”.

As a re­sult, the Chan­cel­lor in­tro­duced a se­ries of short-term spend­ing mea­sures for the NHS and ed­u­ca­tion in­clud­ing £300m for shared ed­u­ca­tion for North­ern Ire­land.

There were some early Hal­loween sparklers, where the Chan­cel­lor is in­creas­ing the per­sonal al­lowance to £12,500 and the higher rate tax thresh­old to £50,000 a year early, from next April.

He also pro­vided some good news for North­ern Ire­land, with his ap­proval of the £350m fund­ing for the Belfast Re­gion City Deal and an ad­di­tional £2m for city cen­tre busi­nesses to as­sist with the af­ter­math of the Bank Build­ings fire.

This is wel­come, par­tic­u­larly in light of the ‘ex­clu­sion zone’ and Danske Bank’s re­cent Con­sumer In­dex that shows con­sumers here have been at their low­est ebb this year as pres­sures of Brexit un­cer­tainty and ris­ing prices take their toll.

We are cur­rently work­ing closely with a wide range of clients to pre­pare and im­ple­ment ‘no deal’ con­tin­gency plans and have found many are post­pon­ing ex­pan­sion plans. There­fore we wel­come the in­creased cap­i­tal in­vest­ment re­liefs in­tro­duced.

The an­nual in­vest­ment al­lowance, which pro­vides for 100% tax re­lief on qual­i­fy­ing plant and ma­chin­ery, has been in­creased from £200,000 to £1m for the next two years and a new ‘Struc­tures and Build­ings Al­lowance’, both of which are aimed to boost cap­i­tal ex­pen­di­ture by lo­cal com­pa­nies.

The range of in­creased tax re­liefs and gen­er­ous spend­ing mea­sures an­nounced in this Bud­get were in­tended to mark ‘aus­ter­ity com­ing to an end’ in light of sig­nif­i­cantly im­proved pub­lic fi­nance fig­ures from the OBR. Un­sur­pris­ingly, how­ever, there were no long-term plans and many peo­ple view this Bud­get as merely a stick­ing plas­ter to get the UK through the Brexit ne­go­ti­a­tions.

While there re­mains much un­cer­tainty over the next few months, this Bud­get does give moral sup­port to those busi­nesses al­ready plan­ning for a ‘no deal’ sce­nario that the govern­ment is do­ing the same.

Their plans in­clude an ad­di­tional £0.5bn (to the ex­ist­ing £3.7 bil­lion) al­lo­cated to govern­ment de­part­ments to pre­pare for Brexit and con­fir­ma­tion that an ‘emer­gency Bud­get’ may be re­quired in the spring in the event of a ‘no deal’ Brexit. It is not too late if your busi­ness hasn’t started plan­ning for Brexit or if you would like to un­der­stand how the Bud­get af­fects your busi­ness, please speak with Peter Legge who can be con­tacted at peter.legge@ ie.gt.com.

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