Usually the most important fixture in the calendar every spring, the Statement this spring has certainly taken a back seat. Brexit is dominating Parliament this month as we still have no clear idea of what will happen come 29th March.
And while a vote to take a ‘no-deal Brexit’ off the table passed this evening in Parliament, without a deal to fall back on, we still have no idea what the UK will look like come 30th March 2019. Understandably Brexit is more of a key concern for businesses and individuals at this time.
The Statement did, however, go ahead, but with a clear message from Chancellor Philip Hammond, “All of us have a solemn duty in the days and weeks ahead to put aside our differences and seek a compromise on which this House can agree in the National Interest”.
While much of the Spring Statement 2019 is Brexit outcome dependent in terms of what our economy is going to look like going forward, we’re going to give you the run-down of some of the announcements and changes that you need to know about in this blog today. Please note: some of this information may be subject to change, we will write up-to-date pieces as the situation settles, and remember we are never more than a phone call away for business or individual tax advice.
As usual, this article will cover accountancy-relevant topics, you can access the full Spring Statement 2019 here.
Updates For Businesses
Report Into Digital Businesses
The Chancellor announced a report into tech giants that dominate their markets. This report may result in new rules to be applied later this year which could allow SME and new innovative tech companies to see greater success, as well as offering a wider variety of products/services to consumers in the UK.
As of the 1st of April, the co-investment rate paid by employers for apprentices will fall from 10% to 5%. In addition, the amount that can be transferred to supply chains will rise to 25% as promised in the Autumn Budget 2018. This represents an improvement to the Apprenticeship Scheme, but certainly isn’t all that employers were asking for, as the scheme still has very tight criteria.
The Government’s efforts over the last nine years have certainly paid off, with a reported £200 billion in tax collected that wouldn’t have been identified if not for these compliance schemes. Today The Chancellor announced new measures are on their way, and they will be publishing papers on preventing abuse of the R&D Tax Relief system for SMEs, a review of Insurance Premium Tax, and a review of VAT Administration in the Isle Of Man following the Paradise Papers allegations.
The first MTD deadline is the deadline for VAT reporting for businesses over the VAT threshold, this is going ahead as planned from the 1st April. It was thought that April 2020 would see the MTD scheme being rolled out to other areas of Tax and to other businesses. However today it has been announced that there will be a ‘light touch’ approach to MTD penalties in the first year, with no additional deadlines set for April 2020. Good news for those under the VAT threshold and good news for businesses who need to be MTD compliant by next month.
Structures and buildings allowance
Draft legislation is on its way that will help businesses invest in non-residential buildings, more information will be available this summer.
Corporate Capital Loss Restriction
There will be a consultation on the update announced in the Budget 2018 to restrict the carried-forward capital losses that a company can offset to no more than 50% as of April 2020
Updates For Individuals
Maturing Child Trust Funds
Draft regulations to ensure that, even after maturity, Child Trust Funds can keep their tax-free status.
National Living Wage Review
Mr Hammond announced a review into the National Living Wage which is to include a review or global innovations to decide if there could be a better model for UK Living and Minimum Wages.