The Chancellor, Philip Hammond, delivered his Spring Statement 2019 today and when he set the date, it was likely he anticipated that the Brexit deal would be all but delivered. However, following last night’s overwhelming rejection of the Government’s deal the Chancellor was left with little opportunity to do more than present a fairly passive review of the UK economy.
The Chancellor made reference to a “deal dividend” if the UK leaves the European Union with a deal and had there been more certainty around Brexit, he could have made dramatic announcements on spending and tax, but as it stands, his hands were firmly tied.
Whilst there were no announcements of substance today, the tone of the Chancellor’s speech indicates that although he is not committing to anything for now, it seems likely that an emergency Budget will take place as soon as a conclusion on the Brexit process is reached – it would be too late to leave this until the autumn.
The Chancellor reiterated the Government’s stance on tax avoidance, evasion and non-compliance issuing a policy paper that sets out their continued approach to tackling these issues as well as giving an indication of the level of success of their targeted activities.
Today’s speech was merely a prelude to a future package of measures and reform for which we may not have that long to wait.
Draft legislation was finally published today on the Structures and Buildings Allowance which will deliver relief for investments in non-residential structures and buildings for businesses that are chargeable to income tax and companies chargeable to corporation tax. It is similar to the former Industrial Buildings Allowances which were abolished in 2011. Qualifying expenditure is eligible for tax relief at a rate of 2% for contracts entered into on or after 29 October 2018.
If we are treated to an emergency Budget we would not be surprised to see announcements around future tax cuts for small businesses, especially after the Chancellor enjoyed a recent unexpected increase in tax receipts. Supporting entrepreneurship in the UK would appear to be at the forefront of the Chancellor’s mind and he may be tempted to increase Entrepreneurs’ Relief and reduce corporation tax further in due course.
Today’s speech was merely a prelude to a future package of measures and reform for which we may not have that long to wait.
For more information, please contact Caroline Le Jeune or Genevieve Morris.