In the midst of [another] frenetic week in Westminster, on Wednesday, The Chancellor delivered his Spring Statement to the Commons. Often referred to as a ‘mini-budget’, the forecast is one of two statements made to Parliament by HM Treasury each year.
The announcement – which Mr Hammond himself previously described as a ‘fiscal non-event’ – was, as you’d imagine, heavily influenced by Brexit. There wasn’t too much of a direct impact on the contractor or self-employed markets. There was also little detail in terms of off-payroll working in the private sector. Though this was expected following the announcement of a delay to changes during last year’s budget.
The impact on business
There were, however, some interesting points relating directly to our sector. This includes the early implementation of Apprenticeship Levy changes, and the introduction of a policy paper to tackle tax avoidance. Here’s a selection of what you need to know from Wednesday’s Statement:
- The Statement included a commitment to report on the time limits for the recovery of lost tax involving offshore matters. This includes those imposed by the 2019 loan charge. In the report, the Government will set out the rationale for – and impacts of – the loan charge on disguised remuneration loans legislated in Finance (No. 2) Act 2017. The report will be laid out by 30 March 2019.
- Changes to the Apprenticeship Levy, announced in the Budget, are to be brought forward, now taking effect from April 2019. In short, employers will be able to share more levy funds across their supply chains, increasing from 10% to 25%. Furthermore, from 1 April 2019, employers will see their co-investment rate halved from 10% to 5%. According to Julia Kermode, the FCSA’s Chief Executive, the move is a positive one for ‘recruitment agents and umbrella employers’. “This is good news for those organisations who often find themselves paying the levy, but are unable to benefit from doing so,” she said.
- A policy paper, ‘tackling tax avoidance, evasion and other forms of non-compliance,’ has been published. It officially sets out the Government’s approach to tackling tax avoidance.
- In the coming months, there will be a ‘call for evidence on simplifying the process of amending a tax return’. And, to encourage smaller businesses to reduce their energy bills and carbon emissions, the Government is also launching a ‘call for evidence on a business energy efficiency scheme’.
- The Office for Budget Responsibility (OBR) expects inflation to stay on – or close to the – target for the duration of the forecast.
- The OBR also predict that employment will increase by over half-a-million by the year 2023.
- Wages are increasing at their fastest pace in over a decade, and are forecast to continue growing quicker than inflation.
- An economist has been appointed to undertake a review of the latest international evidence on the impact of minimum wages. Professor Arindajit Dube’s findings will inform future National Living Wage policy after 2020.
For more information
For a full breakdown on The Chancellor’s Spring Statement, click here. Similarly, if you have any questions regarding the Statement, or are unsure as to the effect it will have on you or your business, call Danbro today on 01253 600 150. Our dedicated team of advisors will be happy to help you.