Was there anything in the Spring Statement to write home about?
March 13, 2019
You could be forgiven for thinking that the Spring Statement was little more than an opportunity for a ‘call to arms’ from the Chancellor to his fellow Parliamentarians to think about protecting the economy as they approach their historical votes on the future of the UK’s relationship with the EU over the next 36 hours.
It is fair to say that, as expected, there were no immediate tax changes in today’s Spring Statement. The Chancellor was at pains to reiterate that the economic landscape remains robust but only as long as the country proceeds with a Brexit deal, so this does leave the door ajar for a possible summer Brexit Budget, should the situation demand it.
But all that doesn’t mean that tax policy was entirely forgotten. Behind the scenes the tax elves are busy beavering away. We received a forewarning of a raft of consultations to come on areas ranging from VAT to National Insurance, from Aggregates Levy to Capital Gains Taxes, from
Structures & Building allowances to Apprenticeship Levies. This will likely mean that we will see a further proliferation of additional measures layered onto an already complex tax system.
The Spring Statement also served as an opportunity for the publication of a summary of measures that the Government has taken, since 2010, to deal with evasion and non-compliance and to reduce tax avoidance. As important as these measures are the hundred additional measures listed serve as a further reminder of the significant changes that the tax system has had to absorb over this period. No doubt also a useful point of reference to any accusations that the Government isn’t trying hard enough to tackle these areas.
We saw a ‘shout out’ in the Chancellor’s speech to the new Digital Services Tax, it was clear that despite other territories getting behind the OECD’s work to find a global approach to the global problem of how to tax the digital economy the UK is still looking to forge ahead with this brand new tax. This seems at odds with an ambition to deliver a “Global Britain” that is competitive in the digital age.
With spending measures focused on housing and the environment highlighted in the speech you could argue that the Chancellor’s was very much trying to talk to future generations. But while technological advancements continue apace and the ways in which people wish to work constantly evolve, our tax system will find itself lagging behind. It’s a shame that the opportunity wasn’t grasped to highlight the need to overhaul the tax system to support modern ways of working and doing business. If we really want to deliver for future generations what is ultimately required is the start of a conversation to address the fundamental issues within our tax system. There’s only so long we can keep kicking the can down the road.