Spring Statement 2019

With Brexit on the Government’s agenda, we did not expect any significant announcements in the Chancellor, Phillip Hammond’s, Spring Statement 2019 speech, and we were not disappointed with the statement firmly concentrated on the Office for Budget Responsibility’s economic forecasts.

Although there wasn’t anything announced by the Chancellor in his speech, Government has published a number of policy papers and a Written Ministerial Statement on the Spring Statement 2019 government page. 

Aspire’s round up;

Tax avoidance, evasion & non-compliance

• Following the statement, Government published a policy paper setting out the Government’s achievements in tackling tax avoidance since 2010
• Government also published a policy paper, offshore tax compliance strategy: No Safe Havens 2019,  setting out the direction for HMRC’s updated strategy for offshore tax compliance
• In coming months Government has confirmed it will publish;
  • A consultation on preventing abuse of the Research & Development tax relief for small or medium-sized enterprise
  • A call for evidence on where improvements can be made to ensure that Insurance Premium Tax operates fairly
  • HM Treasury’s findings and recommendations to ensure the right VAT continues to be paid and collected in the Isle of Man

Apprenticeship Levy

• The changes announced at Budget 2018 regarding the 50% reduction in the co-investment rate (10% to 5%) and the increase in the amount employers can transfer throughout supply chains to 25% will take effect from April 2019

National Living Wage (NLW) & National Minimum Wage (NMW)

• Government published a policy paper asking the Low Pay Commission to make recommendations on the new NLW and NMW rates for April 2020, by October 2019
• Government has published terms of reference which confirm that Professor Dube has been appointed to review the international evidence on the impacts of minimum wages

Maintaining the tax system

• Focus will be on supporting businesses to transition with regard to Making Tax Digital (MTD) which comes into force on 1 April 2019 and the Ministerial Statement confirms that no additional mandating of MTD will be done for any other taxes or businesses in 2020

In the coming months, Government will publish;

• A technical note alongside draft legislation on minor procedural and technical changes to the General Anti-Abuse Rule legislation to ensure it is working how it was intended to
• Technical comments will be invited on the draft regulations for changes to the National Insurance Contributions (NICs) Employment Allowance. It was announced at Budget 2018 that businesses with an employer NICs bill of more than £100,000 would not be permitted to utilise the Employment Allowance
• A report comparing the time limits for the recovery of lost tac involving an offshore matter with other time limits will be published. The report will set out the rationale for the charge on disguised remuneration loans legislated in Finance (No. 2) Act 2017 and its impacts. The report will be laid by 30 March 2019
• A consultation was launched in February 2019 following the announcement at Budget 2018 to make HMRC a preferential creditor for certain tax debts paid by employees and customers on the insolvency of a business. The consultation is open for responses until 27 May 2019