Firstly, the Chancellor’s announcement to Parliament last week was not a budget speech. There were no tax changes announced, in fact, the only change that was announced was to bring forward the expected business rates rebasing exercise one year, to April 2021.
He described his announcements as the first Spring Statement updating Parliament on the economy and other fiscal matters. Which means that the speech was full of the good news: increasing employment, rising GDP growth and manufacturing output, and falling inflation and government borrowing.
Although there were no formal changes to tax announced, the Chancellor did reveal several new consultations on tax issues. These are possible future changes about which HMRC is seeking outside commentary from “interested parties” before considering legislation. They include:
- Reducing single-use plastic waste through the tax system. This will look at ways to reduce the impact of plastic waste in our environment such as disposable plastic cups, cutlery and foam trays. Some of the tax revenue raised will be used to fund research into new ways to encourage a more responsible use of plastic.
- Making sure multinational digital businesses pay a fair share of tax. This is an ongoing attempt to ensure that the larger digital players pay tax in the UK on sales they make in the UK.
- Seeking views on the role of cash in the new economy. Will cash become less relevant as digital payment processes become more widely used? This and the prevention of the use of cash to avoid tax and to launder the proceeds of criminal activity will be opened to a wider debate.
- Supporting people to get the skills they need. Improving skills to benefit growth in the economy by investing in upskilling and retraining, especially by the self-employed.
There was much speculation and bluster in his presentation, but the Chancellor revealed little of substance. It will be some time before the outcome of the above consultations become law, perhaps some of the issues will be part of the Autumn Budget later this year.
Watch this space.