Spring Statement 2019

The Rt Hon. Philip Hammond delivered his Spring Statement yesterday and as expected, so close to Brexit, there was not much by way of announcements or anything of any substance.  

There was a promise of a full spending review following agreement of a Brexit deal and a detailed Budget in the Autumn.  In the coming months, the Government also intends to publish a number of regulations, papers and guides and we have listed below six of the key areas covered.

  1. National Minimum Wage review - The Chancellor has instructed a Low Pay Commission Report to undertake a review of the National Minimum Wage from April 2020 with a view to ensuring that rates are set: “as high as possible without damaging the employment prospects of each group".
     
  2. CGT private residence relief – A consultation on the changes announced at Budget 2018 to lettings relief and the final period exemption, which extend private residence relief in capital gains tax.
     
  3. VAT Partial Exemption and Capital Goods Scheme: Simplification – A call for evidence on potential simplification and improvement of the VAT Partial Exemption regime and the Capital Goods Scheme – ensuring they are as simple and efficient for taxpayers as possible. This follows on from the recommendations of the Office of Tax Simplification, who have looked in detail at our VAT system and possible areas for improvement.
     
  4. Making Tax Digital (MTD) – The Government are committed to MTD and a mandatory digital record keeping for VAT for businesses over the VAT threshold (with turnover over £85,000) will still come into force from 1 April. This is an important first step in this modernisation of the tax system to which the government remains committed. The government confirmed a light touch approach to penalties in the first year of implementation. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued. The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.
     
  5. Late Payment reporting  - The Federation of Small Businesses (FSB) hard work was acknowledged with measures to encourage rapid payment. Larger audit regulated companies will have to report annually in their financial statements on the number of days taken to pay suppliers.  
     
  6. Research & Development (R&D) - Steps were announced designed to encourage the continuation of world class innovation and research centred on the UK. Financial commitments to research programmes with European organisations were confirmed whatever the outcome at the end of the month. Measures to remove restrictions on immigration for PhD level recruits should also support continuing innovation from UK businesses. Changes to the R&D relief for SMEs, due to be implemented from 1 April 2020, would also favour companies employing their researchers rather than subcontracting that work anywhere in the world. 

For more details on what was covered in the Spring Statement , download your copy here.  


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