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SPRING STATEMENT 2018
The Spring Statement 2018 has shown a move to a fiscal event in the Autumn so there are no real announcements on specific tax measures and the Chancellor’s focus was on economic outlook and progress since the last Autumn Budget.
This does show that the Chancellor is serious about limiting tax announcements to just the Autumn Budget, which is welcome news to us, as tax professionals.
What we did see though was the announcement of various new consultations on the changes to the tax regime and these consultation will continue over the forthcoming months:
Some of the consultations announced include:
The Plastic Problem – The Government is looking to explore how changes to the tax system or charges could be used to reduce the amount of single-use plastics we currently waste. We have already seen the introduction of the plastic bag charge, but with HMRC making reference to both Landfill Tax and the Soft Drinks Industry Levy, we could see a new tax introduced in order to effect behavioural change.
Digital Economy – The Government favours a new profit allocation model, where multinational businesses see allocation of profit to where their users are based. The paper published does update the Government’s position but no final decisions have been made.
Taxation of self-funded work related training – HMRC statistics show that over £1.8 million individuals self-fund their own training needs. The vast majority of these individuals are unable to obtain tax relief on the costs incurred. The Government wishes to extend tax and NIC reliefs available to make training more attractive and less costly.
VAT threshold – Historically the VAT registration threshold has proven beneficial to smaller businesses, however there is a view that the threshold is stopping smaller businesses from growing into larger, more profitable ones. The Government is therefore “calling for evidence” of this. Last year the Government claimed credit for resisting calls to reduce the VAT threshold. The Government’s exploratory review which looks to reduce the threshold, indicates that it will help small business to grow but ultimately this will raise more tax for the Exchequer. In addition the Chancellor has looked at VAT administration, taking forward proposals to ensure that the Exchequer receives its VAT directly rather than via the vendor, reducing the risk that the VAT payment will never be received.
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These proposals are subject to amendment during the passage of the Finance Bill.
SPRING STATEMENT 2018
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