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Spring Statement 2019.
A Parliament, preoccupied with the persistent dramas of Brexit, on 13th March witnessed the Chancellor, Philip Hammond, rise to deliver his Spring Statement on the current state of the economy.
Mr Hammond made it clear some time ago that he wanted his Spring Statement to be a rather short financial briefing, and he stuck to such a no-frills script.
A rather lacklustre affair, there were no new tax measures and only minor spending changes. The Office for Budget Responsibility (OBR) trimmed its projections for government borrowing, but it the Chancellor kept his powder dry in view of the forthcoming Spending Review.
At the surface, the Chancellor appeared to have said very little. His statement, however, was followed by some announcements, and the publication of a range of documents, which cover subjects including:
- Making Tax Digital (MTD) – the government confirmed a light-touch approach to penalties in the first year of MTD’s implementation. MTD will not be extended to any new taxes or businesses in 2020.
- Apprenticeship levy – the timing of the reduction in the co-investment rate for employers from 10% to 5%, and the increase to 25% in the amount that employers can transfer to their supply chains, will be brought forward. These changes will take effect from April 2019.
- Draft legislation for the new structures and buildings allowance – for investments in non-residential structures and buildings announced in the 2018 Budget. The relief will be given as an annual 2% flat rate over 50 years for new commercial structures and buildings.
- Review of time limits – for the recovery of lost tax involving an offshore matter, comparing them with other time limits. It will set out the rationale for the charge on disguised remuneration loans and will be laid by 30 March 2019.
- CGT private residence relief – changes announced in the 2018 Budget to lettings relief and the final period exemption.
These documents are likely to result in legislation following the Autumn Budget.
April will feature the customary changes to the income tax rates and allowances, as well as national insurance contributions. This year, there will be another significant hike in the minimum auto-enrolment contributions for workplace pensions. There will also be further increases in the tax on company cars, and another £25,000 will be added to the inheritance tax residence nil rate band, taking it to £150,000.
If you have any questions about how the Spring Statement affects you, please do not hesitate to get in touch.
Best wishes, Argents