13 March 2018 marked the first ever Spring Statement, which has replaced the Spring Budget.
The main purpose of the Spring Statement was not to announce immediate tax changes or spending policies, but to give the UK an update on the state of the economy and public finances. Some of the main discussion points were:
- Growth forecast for 2018 revised upwards from 1.4% to 1.5% – 1.3% growth forecast for 2019 and 2020 remain unchanged
- Government forecast to borrow £45.2bn in 2017-18 – £4.7bn lower than predicted in November
- £1.5bn allocated so far to departments to prepare for Brexit in March 2019
- £1.67bn given to London to start building a further 27,000 affordable homes by the end of 2021-22
- The National Living Wages will rise to £7.83 in April
- 60,000 first-time buyers have benefited from stamp duty holiday since November 2017 Budget
- Next revaluation of business rates to be brought forward by one year to 2021
- New consultations were announced in the following areas:
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- Reducing single-use plastic waste through the tax system
- Making sure multinational digital businesses pay a fair share of tax
- A new VAT collection mechanism for online sales
- Creating a fund structure within the Enterprise Investment Scheme (EIS) for investment in innovative knowledge-intensive companies
- Extending current training relief to self-employed people and employees
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The outcomes of the five consultations announced in this Spring Statement may not take effect until 2020/21, but will be further detailed in the 2018 Autumn Budget.
If you have any queries about these announcements, please contact one of the tax team.