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Spring Statement 2018

We were promised a very short Spring Statement with most of the juice reserved for Autumn Budgets, and that’s what we got in today’s – 13 March 2018 – Spring Statement.

The speech was short with little tax content of interest; the fiscal aspects – growth and borrowing – will be covered well in the media, so we won’t go further into this aspect; to be honest reading the speech it seems more like political rhetoric than anything substantive, and its suspected much of what was said had been pre announced.

There were a handful of announcements on policy and of consultations, but not the normal list of Budget Notices.

HM Treasury Announcements can be seen here in full

The following are worth a mention:

  • Updated position paper on “Corporate Tax and the Digital Economy” – you get a sense of the reform HM Government would like to see viz the tech giants like Amazon, Google and Apple, and the multinationals like Starbucks, but they are hampered by other OECD and G20 members protecting their tax base.
  • Consultation on “Tackling the Plastic Problem” – been in the news a lot, of course.
  • Minor change to Entrepreneurs Relief for diluted holdings – a sensible move benefiting entrepreneurs selling equity.
  • Consultation on “Cash and Digital Payments in the New Economy” – covering competition in payment processing (credit card processors, etc); access to ATMs; why people still need to use cash and/or prefer to do so; tackling the role of cash in money laundering, tax avoidance and other criminal activity.
  • Outcome of 2016 consultation on “Business Rates: Delivering More Frequent Revaluations” – a move to 3 yearly revaluations rather than 5 yearly, but discounting self assessment or formula valuations – this means the Valuation Office Agency will need to revalue each business property individually – much work and a lot of potential for disputes and appeals.
  • “VAT Registration Threshold – Call for Evidence” – after speculation before Autumn 2017 Budget that the VAT threshold would be significantly reduced, at that stage it was announced there was no immediate intention to do this, but instead it would be frozen at £85k for two years pending a review of the distortions the threshold creates – mainly around businesses trading just below the VAT threshold by fair means or foul. This is a call for evidence around that review, and moots the possibility of a phasing in of the effects of VAT when the registration threshold is breached rather than the current cliff edge.
    Latest EU plans to mandate a €85,000 – around £75,000 – maximum threshold are discussed – this is due to come in after Brexit date, but who knows honestly how VAT will work post Brexit and how much we will be tied to the EU, so this could effect UK.
    Its worth a read of this document, and responding if you have time.  Apparently there is an easy 7 minute consultation available via Survey Monkey.
  • Consultation on “Taxation of Self Funded Work Related Training” – how to incentivise people to train / retrain but without subsidising recreational training.
  • Consultation on extending Tax Security Deposit Legislation – in existence for VAT, PAYE and some other taxes already, its proposed to extend it to Corporation Tax and Construction Industry Scheme Deductions.  Generally this is a sensible proposal, and HMRC haven’t abused their powers to date focusing them on people behind tax debts / serious default.
  • Two consultations around tax compliance in the digital economy.
    The first, “Online Platforms Role in Ensuring tax Compliance” discusses problems around tax education and compliance in the online selling, renting and gig enconomies – Uber, Airbnb, eBbay.
    The second, “Alternative Method of VAT Collection – Split Payment” consults on proposals for VAT / tax to be stopped at source for UK onshore sales to offshore sellers, the tax deduction being made by the Payment Processor / Credit Card Acquirer – at first glance it looks complex, but its a sensible revenue protection measure when suppliers have no physical base in the UK.

And one notable omission – any further consultation or proposals on reform of Private Sector IR35.  Maybe its too complicated?  Maybe its coming.  Hard to call.