Highlights from the Spring Statement

14 March 2018 • HMRC News

Philip Hammond’s new style of Spring Statement was aimed at making a statement on the health of the economy and not as a forum to announce tax changes or spending announcements. Mr Hammond was keen to stress that the economy had performed better than expected, with a predicted growth of 1.5%, plus the expected reduction in inflation during the coming year should produce real wage growth in 2018/19.

Following his speech yesterday, our tax team here at Warrener Stewart has analysed the information to share any points of interest that might affect SME business owners. Most notably, he used the Spring Statement to announce bringing forward the introduction of the next business rates valuation to 2021, plus assistance to increase production in small businesses. He also spoke about measures designed to eliminate late payment, certainly a welcome intervention for many business owners in light of recent failings like Carillion.

Rather than announcing tax changes the Chancellor did announce the start of several consultation documents to help shape future taxes. Amongst these is the consultation on reducing tax on the least polluting vans, and ways to tackle single use plastic waste. There is also going to be a consultation on the role of cash within our ever-growing digital economy, including looking at continuing with 1p and 2p coins, and £50 notes.

The Chancellor has asked business owners to share their views on whether the £85,000 VAT registration threshold is helping them or creating a burden. Likewise, the government is keen to know what business owners think about their revisions to their proposals on corporate tax for the digital economy. They will also be holding a series of collaborative workshops to review alternative methods of VAT collection.

Commenting on the Spring Statement, Warrener Stewart’s tax director Ryan Lane said; “The main purpose of the Statement seems to have been a reassurance to the country that we are on track and to engage with businesses on their future via the many consultations they announced.”

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