Spring Statement 2018 - Key Points
Dated: 13 March 2018 Author: Richard McNeilly, Managing Partner
Key Points from the Spring Statement
This week Chancellor Philip Hammond set out changes to the government’s taxation income and expenditure in his first Spring Statement, many of which will have an impact on the way the UK’s small businesses operate in the future.
The main tax theme seemed to be a significant focus on consultation about the digital economy. Areas covered include:
- Investigating whether it is feasible to attribute revenue from large overseas digital businesses to the UK, so it can be taxed here. This seems very open-ended, but it should be noted that existing international tax rules do already try to apportion revenue to the appropriate country. Unilaterally applying different rules could make life rather complex, and could easily lead to double taxation.
- Automatic VAT collection on online sales, to avoid non-payment by overseas sellers. This might even extend to UK online sales as well: this would avoid the intermediaries having to differentiate between transactions, but could have wide-ranging ramifications. In theory this should raise a reasonable amount of revenue, but could impose some awkward barriers to selling, especially if it applies to UK traders who are below the threshold.
- Having online platforms help their users to be compliant, whether by providing information about sales or by withholding tax from payments made through them. There is an obvious connection here to Making Tax Digital, but at this stage of the MTD process it does look like a complex undertaking. HMRC are known to obtain information from such platforms already, so formalising the process and making it widespread would seem like a useful avenue to explore.
Other issues which are on the table are the business rates revaluation, releasing funds from the apprenticeship levy to help SMEs, a rather open-ended conversation about the VAT threshold, and a suggestion about taxing single-use plastics.
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