The Chancellor has presented his first Spring Statement. As expected, it was a short statement, which concentrated on giving headline economic figures, rather than any detailed tax changes. However, the Chancellor did launch several consultations which invite views on future changes to the tax system. We would expect legislation to be announced in the Budget in the autumn.
Interestingly, there were strong hints that the Autumn Budget might be very interesting. The Chancellor more than alluded to tax cuts and increases in public spending. Might this be clever timing in advance of a General Election, possibly as early as Spring 2019? We will see. The consultations announced are:
Reducing single-use plastic waste through the tax system
There will be a consultation as how best to use the tax system to encourage the responsible use of plastic. Some of the money raised from any tax changes will be used to encourage the creation of new, greener products and services. In addition, £20 million from existing budgets will be given to businesses and universities to research ways to reduce the impact of plastics on the environment.
Making sure multinational digital businesses pay a fair share of tax.
The use of digital platforms for selling goods and services has changed the way in which traditional businesses operate. Digital businesses create value in a unique way, relying on the participation and engagement of their users. This is not always reflected in where such multinational businesses pay tax on their profits. There is also the risk that not all the VAT collected on digital sales ultimately is paid over to the Exchequer.
The government has set out its thinking as to how the tax system can change to give a fair result for digital businesses.
Seeking views on the role of cash in the new economy
Digital technology has changed the way people shop, sell, and save. While cash will continue to be an important method of payment, more people are moving towards digital payments every year.
The government is consulting on what more it can do to:
- support people and businesses who use digital payments
- ensure that those who need to are able to pay with cash
- prevent the use of cash to evade tax and launder money
Supporting people to get the skills they need
Improving people’s skills benefits both individuals and the wider economy. To support upskilling and retraining, the government is consulting on extending the current tax relief to support self-employed people and employees when they fund their own training.