The Chancellor delivered the Spring Statement on 13 March 2018. As the main budget announcements have now been moved to autumn, the spring statement gave a summary of the economic position and indicated areas on which the government is consulting with a view to future tax changes.
The economy is projected to grow at 1.5% in 2018 and 1.3% in 2019. The rate of inflation is projected to fall over the coming year. The national debt as a percentage of GDP is predicted to fall from 85.6% in 2017/18 to 77.9% in 2022/23. The Chancellor noted that the national debt is still too high and makes the UK economy vulnerable to future shocks.
Business rates
The business rates are the local tax on businesses, based on the value of property. For this purpose regular property revaluations are required. At the autumn budget in November 2017 the Chancellor indicated that business rates revaluations will be carried out every three years (instead of five years) after the next revaluation. The Chancellor has now announced that the next revaluation will be brought forward to 2021 (instead of 2022). There will then be a revaluation three years after that in 2024.
Reducing plastic waste through the tax system
The Chancellor announced a consultation on how to use the tax system to reduce plastic waste by encouraging more sensible use of plastic products. Any money raised from tax changes on plastic will be used to encourage the development of environmentally friendly products and services. The Chancellor also indicated that GBP 20 million is to be allocated from the existing budget to businesses and academic institutions to reduce environmental pollution by plastic waste.
Taxation of digital businesses
Digital businesses depend on the participation and engagement of their users in creating value. This aspect of the business is not always taken into account in determining where a multinational business pays its tax. The government has therefore been consulting on ways in which the tax system could be adapted to achieve a fairer result in the case of tax paid by digital businesses and has published an updated position paper..
Role of cash in the economy
As digital technology has changed the methods by which people shop, sell goods and save money the government is consulting on changes it may need to make. The aim of the changes would be to support people and businesses making digital payments; ensure that people can still use cash to pay when they need to; and prevent the use of cash for purposes of tax evasion and money laundering.
Tax relief for retraining
The government is asking for comments on extension of tax relief to apply to situations where self employed persons or employees pay for their own retraining.
