March 13th, 2019
A summary of the key tax announcements from the Spring Statement 2019
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.
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.
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.
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).
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.
A discussion paper has been published reviewing the way in which the Aggregates Levy is structured and currently operates.
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.
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.
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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