Given that this year’s Spring Statement was made in the midst of uncertainty over Brexit that is approaching crisis point, no one was expecting fireworks from the Chancellor. Philip Hammond MP, did however, use the Spring Statement to build on measures introduced in last year’s Budget and to launch consultations on a number of other policies. Notable was the confirmation that the Digital Services Tax will be introduced in April 2020 and a surprise review of R&D tax relief for SMEs that will be worrying SME business leaders.
The Chancellor did not give in to pressure to delay Making Tax Digital for VAT. However, it is good news that MTD for other taxes will not introduced until the transition to MTD for VAT has bedded in: it was confirmed that full MTD filing will not start from April 2020 but no expected start date was announced.
We have provided more detailed analysis of the most important policy announcements in the Spring Statement.
The Government has published a tariff of custom duty rates that will apply to all imports from March 29 in the case of a No Deal Brexit. The new tariff has in fact removed customs duties from a huge range of goods and adopted EU duty rates for others. Our analysis provides more detail and recommends actions that businesses should take.
This strategy launches a range of measures design to help HMRC obtain the correct taxes from businesses, individuals and trusts. There are measures to extend time limits on investigations into off-shore issues and cases of reasonable care and carelessness. HMRC is also using data and technology to prevent common issues rather than investigate them after the fact.
HMRC research has revealed that almost two-thirds of companies have yet to make the operational changes required to comply with CCO. CCO is relevant to all businesses and organisations and requires at very least a thorough risk assessment of current policies and procedures.
This article provides a detailed analysis of HMRC’s research and more importantly links to practical guidance and tools to help ensure compliance.
The Government have published for consultation the details of the Structures and Buildings allowance. Some of the issues addressed include periods of disuse, demolition leases. The consultation will close on 24 April 2019 with the Government planning to publish responses in May.
The Chancellor used the Spring Statement to announce a number of consultation documents that will be published over the coming months as well as responses to previous consultations. BDO will, when it is appropriate, respond to Government consultations in order to protect the interests of our clients and the mid-market ‘economic engine’.
Below we list the most important consultations for business and individuals which the government will publish over the coming months.
Offshore receipts in respect of intangible property – Draft regulations draft guidance relating to the practical application of the measure.
Hybrid and other mismatches – A proposed update to the definition of regulatory capitalinstruments that are entitled to an exemption within the hybrid mismatch rules.
Preventing abuse of the R&D tax relief for small- or medium-sized enterprises (SMEs) – A consultation on measures to prevent abuse of the R&D tax relief for loss-making SMEs (by re-introducing a PAYE and NIC limit for total cash tax credits claimed).
National Insurance Contributions (NICs) Employment Allowance draft regulations – Consultation inviting technical comments on the draft regulations implementing the reform of the NICs Employment Allowance.
VAT Simplification and the Public Sector – A potential reform to VAT refund rules for central government, with the aim of reducing administrative burdens and improving public sector productivity.
VAT Partial Exemption and Capital Goods Scheme: Simplification – A call for evidence on potential simplification and improvement of the VAT Partial Exemption regime and the Capital Goods Scheme.
Review of Time Limits – A report, to be laid by 30 March 2019, comparing the time limits for the recovery of lost tax involving an offshore matter, with other time limits, including those provided for by Schedules 11 and 12 to the Finance (No. 2) Act 2017.
Enterprise Investment Scheme (EIS) approved funds guidelines – Consultation on draft guidelines alongside draft legislation. The document contains HMRC’s proposed policy and practice for approving funds.
CGT private residence relief – A consultation on the changes to lettings relief and the final period exemption, which extend private residence relief in capital gains tax.
Protecting your taxes in insolvency – A consultation launched in February 2019 on making HMRC a secondary preferential creditor for certain tax debts.
Corporate Capital Loss Restriction – A consultation on a change to restrict, from 1 April 2020, the amount of carried-forward capital losses a company can offset to no more than 50% of the chargeable gains arising in a later accounting period.
Stamp Taxes on shares consideration rules – A consultation on aligning the consideration rules of Stamp Duty and Stamp Duty Reserve Tax and introducing a general market value rule for transfers between connected persons.
Digital Services Tax – A consultation on the details of the Digital Services Tax.
Amendments to tax returns – A call for evidence on simplifying the process of amending a tax return.