It’s budget time again, which must mean that autumn is in the air, the nights are drawing in, and the countdown to Christmas is well and truly on.
Only, that’s actually not the case, is it? According to the Xmas Clock, we’ve still got close to 200 days left before the turkeys start getting hot under the collar, and the weather outside looks a lot more like summer than anything else (although, this being England, nothing is a given). So what’s going on? What’s with all this talk of budgets?
The answer is that we’re about to be presented with what George Osbourne and the Conservative government has termed a ‘stability budget’. Not sure what that is? Don’t worry, you’re not alone.
To get a little insight into what it is and how it affects us, we asked Kenny Fitzgerald over at our mothership – My Accountant Friend – to give us the lowdown.
Right then, Kenny. Answers please. What is this ‘stability budget’, and why are we getting one?
Basically, it’s down to the fact that we have a brand new government. The Conservatives may have been in power before the recent election, but they were in power as part of a coalition, so their policies (they would claim) were always a tad watered down. They promised during the election campaign that they’d be making changes to the existing budget if they got into power, and so this is them putting all of that into action.
But what does all of that have to do with ‘stability’?
Well, it’s a kind of interim thing. It’s called a ‘stability budget’ because they want to show that they’re balancing things out between now and the usual announcements in the autumn.
Nothing to do with stabilisers, then? It’s not like they need stabilisers on their budget while they find their balance?
Balance is probably the only relevant word you’ve used there. Put the stabiliser analogy down and step away quietly.
Whatever you say, Kenny. Tell us, then – have stability budgets happened in the past?
Yes, there was a budget 90 days after the last election, but it wasn’t called a ‘stability budget’. That one was called the ‘emergency budget’.
Why the difference?
I wouldn’t like to speculate too much, but it’s all semantics isn’t it?
It probably had as much to do with the need for an actual emergency budget in the wake of the financial crisis as it had to do with the need to expose the problems and – in their eyes, at least – people who led them into the crisis in the first place. It’s all politics, isn’t it? Let’s not go there.
Good call, Kenny. Can you tell us what effect a ‘stability budget’ tends to have?
That depends largely on what they change, but basically you might expect them to alter bits and pieces around the previous budget that no longer fit with their policies and views. In this instance, their stated aims are to decrease the deficit and help stimulate business across the country – George Osbourne has promised a ‘laser-like focus on raising productivity and living standards’. They’ve also said that they intend to target tax avoidance, with the chancellor saying that ‘everyone should pay their fair share.’ We won’t know the full extent of their plans until July 8th, at which point I’ll be back here discussing this question in more depth. Won’t you join me?
With bells on, Kenny! Do you know yet how this will affect small business owners, freelancers and contractors? At The Life Hub, these are the people we’re interested in hearing about.
Again, the devil will be in the detail. We don’t know enough yet to make detailed predictions, but at My Accountant Friend we’ll be reviewing the budget as it happens on July 8th, so that we can provide quick updates for our clients and determine what (if any) impact it’ll have on them as small business owners and individuals. As always, we’ll be available on the phone and via email throughout the day, so they can get in touch whenever they like to discuss things.
My Accountant friend is an on-demand accountancy service for contractors, freelancers and small-business owners, combining a user-friendly online dashboard, a great receipt-scanning app and a dedicated personal contact that you can call any time. Get in touch to find out how we can help you get away from the spreadsheets and get back to doing what you do best.