The Chancellor delivered the Spring Statement on 13 March 2019. There were no major tax announcements owing to the uncertainty currently surrounding the UK’s withdrawal from the European Union.
UK economic growth is to fall to 1.2% for 2019, rising slightly to 1.4% in 2020 and to 1.6% in 2021. An exit from the EU without any deal would however significantly hit the UK economy in the short and medium term.
The national debt is forecast to be 82.2% of GDP in 2019/20, falling to 73% of GDP in 2023/24.
Spending review
The Chancellor noted that if a Brexit withdrawal agreement is finalised and approved he will launch a full three-year Spending Review before parliament’s summer recess, to be completed in time for the Autumn Budget.
Making Tax Digital
From 1 April 2019 Making Tax Digital for VAT requires VAT registered businesses with taxable turnover above the VAT registration threshold to keep records in digital form and file their VAT Returns using software.
The software which businesses use must be capable of keeping and maintaining the required records, preparing VAT Returns using the information maintained in those digital records and communicating with HMRC digitally through the Application Programming Interface (API) platform.
The Chancellor confirmed in the spring statement that Making Tax Digital will not be mandated for any other taxes or businesses in 2020.
Late payments
To assist in dealing with the issue of late payments for small businesses, audit committees will now be required to report late payment practice. This is intended to boost small businesses as they currently need support and a confidence boost.
Green policies
The chancellor has announced the mandatory banning of fossil fuel heating systems in homes from 2025.
Visas
To help research institutes and innovating businesses the Chancellor announced an exemption for PhD-level occupations from the cap on high-skilled visas, commencing from autumn 2019. Overseas research activity will also count as residence in the UK for the purpose of applying for settlement, so researchers will not be penalised for time spent conducting fieldwork abroad.
Tech companies
Additional support for science and technology in an effort to boost the economy and create highly skilled jobs. The Chancellor welcomed the Furman review of competition in the digital economy which highlighted the dominance of the tech giants. The government will respond later this year to the need to update competition rules for the digital economy, opening up the market and increasing choice and innovation.
The Chancellor has asked the Competition and Markets Authority to carry out a study of the digital advertising market, as recommended by the Furman review.
