What we may see in the last ever Spring Budget
Ahead of the Spring Budget 2017 we have outlined what we expect to see announced by Chancellor Philip Hammond.
By way of reminder, this will be the last budget to take place in March, and a second budget will take place this Autumn (2017). Thereafter, we will have an annual Spring Statement starting in 2018 followed by an annual Autumn Budget.
As predicted by Corporate Recovery & Insolvency Partner Jeremy Oddie there is growing concern amongst businesses soon to be affected by a hike in business rates. Business lobby groups are calling for the Government to deliver reform to the rates system with the suggestion being to bring forward the switch from RPI to CPI to April 2017 instead of 2020.
With ‘Making Tax Digital’ taking centre stage of late, it is anticipated that a final report on the corporation tax computation review will now not be available until the second half of March. There is hope in some quarters that corporate taxes could be reduced to 15% to make Britain more attractive to international businesses but in light of Brexit that may be premature.
The ongoing devolution debate rumbles on and we wouldn’t be surprised to see devolution of powers to local government appearing on the Treasurer’s agenda once again, especially in light of the West Yorkshire Combined Authority recently seeking clarity from the Communities Secretary for progression with their deal.
IPT for Charities
Charities may be left disappointed as despite lobbying for an exemption insurance premium tax is still set to rise from 10% to 12% in June 2017 with financial secretary to the Treasury Jane Ellison suggestion exemption from PIT would be up to the individual insurance company to pass on the savings.
Research & Development Tax Relief
The government were recently asked to clarify their intentions towards R&D tax relief and Treasury Minister David Gauke confirmed they were assessing the R&D landscape with a view to making the UK a competitive place to conduct research and development activities. He confirmed that the review would conclude at next week's Spring budget.
Savings & Pensions
Towards the end of 2016 the Government confirmed the final savings rate for Investment Guaranteed Growth Bonds would be confirmed at the 2017 Spring Budget.
The FSB has long been calling for the Government to take action to shore up defined benefit pensions and the Treasurer may well clarify this next week.
With the IHT limit having not increased since 1982, Old Mutual Wealth have made calls for the Government to revise inheritence tax allowances and thresholds.
Self Employment Tax
There have been calls for clarification of the statutory definition of self employed two address two concerns: the Government’s assertion that there is evidence that businesses are using self-employment laws to avoid tax, and better treatment of permanent and self employed workers. The Chancellor is likely to announce reforms on 8th March to address these concerns.
Despite the Office for Tax Simplification’s claim that they would be publishing a paper addressing Stamp Duty Reforms before the Spring Budget, this is now expected to take the form of a shorter note, with a final report due in Summer 2017.
The OTS are pushing forward with their VAT simplification project. Full details will be announced in the Autumn 2017 budget, with an interim report promised for next week’s Spring budget. There is also speculation that the Government may reintroduce postponed accounting for import VAT which allows businesses to offset import VAT via their quarterly returns. Recent Brexit announcements may influence this further.
We will be posting on the day commentary next Wednesday 8th March with a full digest issued shortly thereafter.