Chancellor of the Exchequer Philip Hammond presented his Spring Statement to Parliament on Wednesday 13 th March; the wider implications of which are sure to impact upon SMEs across the UK.
The Chancellor announced a while ago that the Spring Statement would not be a fiscal event, and all tax measures would be announced at the Autumn Budget. Given the record of recent Chancellors one could be forgiven for being sceptical, but it appears that he is indeed being true to his word and no new tax measures have been announced.
Budget speeches are always accompanied by a certain amount of detail in supporting documents, but in this case there is very little and it mainly continues measures announced at the Budget.
So from a tax perspective there is nothing in the Spring Statement to concern businesses or individuals. However, both Brexit and the introduction of Making Tax Digital (MTD) are very close now, and the impact of each is still unclear.
Especially after the recent parliamentary defeat of ‘The Deal’, of course, Brexit is definitely the more urgent issue. It seems that the position will not be at all clear until very close to the 29 th of March, but it is certainly possible to take some steps to smooth over the administrative impacts of an exit, even if the economic ones are somewhat open.
MTD at least can be acted on with some certainty. If you think you may be within the scope of it, and have not done so already, you should definitely be taking action to confirm that you are compliant.
Comment from the Lambert Chapman Partners:
As expected there were no significant announcements during the 2019 Spring Statement given the uncertainty surrounding Brexit.
Chancellor Philip Hammond confirmed expectations of continued growth in the UK economy albeit with a reduction to 1.2% from the expected 1.6% but quite frankly what does a statement like this really mean when we do not know what is happening with Brexit?
On a positive note there have been no changes to already released income and business tax thresholds so we will see the personal allowance increase to £12,500 in April and higher rate start from £50,000.
Corporation Tax is still expecting to fall to 17% in April 2020 and the annual investment allowance is already in at £1million from 1 January 2019 for a period of 2 years.
One announcement that did catch my attention which I am sure businesses will welcome – The confirmation that Making tax Digital (MTD) will not be rolled out for other taxes until 2021 at the earliest. This will give 2 years to make sure the new system is working well. As VAT registered businesses with a VAT turnover in excess of £85,000 prepare for Making Tax Digital (MTD) for VAT from 1 April 2019 this is a positive step.
If you have any questions regarding MTD then please contact your local Lambert Chapman contact.