2019 Spring Statement Highlights

13/03/2019

Today Chancellor Philip Hammond presented his last Spring Statement before Britain is due to leave the EU.

As expected, there was little in the announcement regarding tax changes for businesses or individuals. There was however positivity surrounding the better shape of public finances, amongst concerns over the economic struggles caused by the continuing uncertainty of Brexit – something he had hoped would have been clearer after last nights vote.

He highlighted how the UK economy continues to grow with reduced debt and borrowing, and noted how wage increases and unemployment at historic lows will help to create “a solid foundation on which to build Britain’s future”.

A written ministerial statement released after the announcement outlined some further details to be aware of:

• National insurance (NI) – The government has published draft regulations for comment to implement the previously announced change to the employment allowance. This will mean that the allowance will only be available to businesses (or groups of business) with an employer NI liability of £100,000 per annum or less.
• Making Tax Digital (MTD) – MTD for VAT comes into force on the 1^st April 2019 for VAT registered businesses with taxable turnover above the VAT threshold. Today’s announcement confirmed that the government will not be mandating MTD for any new taxes or businesses in 2020. Their focus will instead be on helping businesses to transition to the new regime.

Points of interest from the 2018 Autumn Budget:

• Structures and buildings allowance – draft legislation has been published for comment on introducing a permanent allowance for investments in non-residential structures and buildings to create a more competitive tax regime for businesses.
• Capital Gains Tax private residence relief – There will be a consultation in relation to changes announced in the Autumn Statement from April 2020 on the reduction of the final period exemption from 18 – 9 months and reforms to letting relief.
• Corporate Capital Loss Restriction – there will be a consultation on the change to corporate capital loss restriction to restrict, from 1 April 2020, the amount of carried-forward capital losses a company can offset to no more than 50% of the chargeable gains arising in a later accounting period.
• Stamp taxes on shares consideration rules – A consultation on aligning the consideration rules on Stamp Duty and Stamp Duty Reserve Tax and introducing a general market value rule for transfers between connected persons.
• Preventing abuse of the R&D tax relief for SMEs – There will be a consultation on the measure announced at Budget 2018 (see page 7 of our summary document). The consultation will focus on how the measure will be applied, to minimise any impact on genuine businesses.

The Chancellor also announced that, if a Brexit deal is agreed, there is an intention to launch a new spending review before the summer, concluding before the next budget in the Autumn. It will be used to set departmental budgets, including 3-year budgets for resource spending if a EU exit deal is reached.

To conclude his statement the Chancellor stressed that building a stronger economy would only be possible by avoiding a no-deal Brexit. We await the result of a further vote on this this evening (13^th March).

Later this week we will send you a more considered review of the announcements, along with some practical reminders and opportunities that you need to be aware of as one tax year ends and another begins.

If you have any immediate queries from today’s statement on your tax affairs, please contact Paula Jeffs or your usual WMT tax advisor.