With 29th March fast approaching the Spring Statement, as expected, was pretty non-eventful in respect of any new imminent tax announcements. Following changes in 2018, the Spring Statement is designed to be a fiscal non-event and 2019 delivered just that but overshadowed by the threat of a no deal Brexit. A spending review will be delivered before Summer recess and will be impacted by the Brexit outcome over the coming weeks.
There were some publications and draft legislation was announced. A No Safe Havens 2019 was published showing HMRCs continued strategy to bring about compliance in cases of avoidance and evasion and for the compliant taxpayer that tax is reported correctly the first time in relation to offshore income and gains. With the transparent world that we are in and the access to data that HMRC now has, we should expect further measures in future budgets, with the onus being put on the taxpayer to get it right the first time. The absence of HMRC guidance around complex or poorly drafted legislation adds to the continued challenge of reporting offshore income and gains. The document does refer to investment in guidance and maybe there can be a future which bridges the gap. A review of time limits report is also due by the end of March which will compare the limits on the recovery of offshore tax with other time limits.
Draft legislation was also published today in respect of the new ‘Structures and Buildings Allowance’ (SBA). An annual 2% capital allowance deduction, in respect of new non-residential structures and buildings, will be allowable for physical construction works entered into on or after 29 October 2018. SBA will not qualify for the Annual Investment Allowance (AIA) which increased to £1 million per annum until 31 December 2020.
A £700 million investment in apprenticeships for smaller companies is being brought forward with halving the 5% Apprenticeship Levy co-investment rate now taking effect from April 2019.
It was also announced that Making Tax Digital (MTD) will not be extended to other taxes outside of VAT in 2020 as originally anticipated, which is a welcome relief.
We can expect draft regulations, consultation or technical comments thereon to be published in the coming months on the following:
- Offshore receipts in respect of intangible property
- National Insurance Contributions Employment Allowance
- Simplification on VAT refunds and capital goods scheme
- CGT private residence relief
- Corporate Capital Loss Restriction
- Preventing abuse of the R & D tax relief for Small or Medium Sized enterprises (SMEs)
- Stamp taxes on shares consideration rules
- Digital Services Tax which is due to take effect from 1 April 2020
- A call for evidence on simplifying the process of amending a tax return