A summary of the key tax announcements from the Spring Statement 2019

Personal Tax

There were  no specific announcements of changes of rates or allowances.

Making Tax Digital

The  statement contains the following “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”. There is no more detail, but this does seem to imply that when MTD is rolled out for income tax it will be on a voluntary  basis. If this is the case this is a significant move because it will allow  people to move across to MTD at their own pace.

Private Residence Relief

There will  be a consultation on lettings relief and the final period exemption following  the announcement in Budget 2018

Child Trust funds

Draft  regulations will be issued to ensure that such accounts retain their tax-free  status on maturity.

Business Tax

Capital allowances

The  structures and building allowances legislation has been published in draft–  this sets out the details of the new allowance announced in Budget 2018 which  will give a measure of relief for expenditure on buildings and structures.

EIS

Draft  guidelines will be published for comment on HMRC’s policy and practice in  relation to approved funds.

Social Investment Tax relief

The take up  of this has not been as high as expected and there will be a call for evidence  to establish why this is the case.

Digital Services Tax

There will  be a consultation on the detailed design and implementation of the new tax,  which comes into effect on 1 April 2020.

Intangibles and Hybrids

Regulations  will be published for the new rules on offshore receipts in respect of  intangible property and technical aspects of the hybrid and other mismatch  rules.

Corporate capital losses

HMRC will  publish a response to the consultation on corporate capital losses.

Employment  Tax

There will  be consultation on the technical aspects of the National Insurance Regulations  relating to the proposal to  restrict the employment allowance to smaller businesses (those with an NIC bill  below £100K).

Indirect  Taxes

Public Sector

A paper  will be published which looks at potential reform of the way that VAT refunds  are dealt with in the public sector – it is not clear whether this will be for  the whole of the public sector or simply for central government.

VAT partial exemption and the capital good  scheme

There will  be a call for evidence on the operation of these two regimes following a  recommendation from the Office of Tax Simplification.

Aggregates Levy

A  discussion paper has been published reviewing the way in which the Aggregates  Levy is structured and currently operates.

Tax  Administration

GAAR

There will  be minor and technical changes to the General Anti Abuse Rule to “ensure that  it works as intended”. It is not clear what these might be, but it does not  look as if there will be major structural changes.

Tax returns

There will  be a call for evidence on simplifying the process of amending a tax return.

The loan charge

The review  of the effectiveness of the loan charge has not yet been published. It will be  published by 30 March.

Insolvency

The  government will publish a response on the provisions which would make HMRC a  preferred creditor for certain tax debts in an insolvency.

Tackling tax avoidance, evasion and other forms  of non-compliance

This  document was published today. Much of it simply repeats what we already know  about what HMRC has done in the last 10 years to tackle evasion and avoidance.

Notable is  Annex B, which gives the government’s formal response to the requirement in FA  2019 ss92 and 93 to review the effectiveness of certain anti-avoidance  provisions. Anybody expecting detailed reports will be very disappointed. In  almost all cases the response is that the measures have only recently come into  effect and therefore there is no data to assess their effectiveness. Similarly,  there is bland statement against most of the provision that it is not  anticipated that the section will introduce any new tax avoidance  opportunities. There is a timing issue here. Even after a measure has been  enacted there will be a long delay before HMRC receives returns which might be  affected by the change in legislation, and then HMRC will need to spend time  reviewing those returns. The reality is that an effective review can only be  done several years after a measure has been enacted.

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