Yesterday saw the first Spring Statement delivered to the House. Here are the key points on the health of the economy and changes since the last Budget:
- Growth exceeded the OBR’s forecast – with the economy growing by 1.7% in 2017, compared to a Budget forecast of 1.5%
- Over £1.5 billion so far devoted to departments in order to prepare for Brexit
- The budget for the Housing Growth Partnership will be more than doubled to £220 million
- The National Living Wage will increase to £7.83 in April
- The tax-free personal allowance to rise to £11,850 next month
- There will be a consultation on how the tax system can better support training for the self-employed
- The government plan to consult on VAT collection for online sales
- As announced in the Budget, there will also be a government consultation on the design of the VAT registration threshold, with a call for evidence on the topic released yesterday
- Research will be done into how to encourage cashless and digital payments
Disappointingly, there was no update on IR35 reform. It was expected that the Chancellor would mention the much-anticipated consultation on a potential extension of IR35 rules to the private sector. Similarly, we are yet to receive details on what impact the public sector reforms, introduced last April, have had.
Does No News mean Good News?
All indicators have previously pointed towards April 2019 as the date for a possible private sector rollout. However, as the Intermediaries’ Legislation was missing from yesterday’s speech, could it mean that we are being given a welcome break from legislation?
With the IR35 consultation due within the next couple of months, we would expect any legislation change to be announced via the Autumn Budget. If the Budget comes and goes without any announcement, we could see a rollout pushed back to April 2020, or even further.
Whilst silence on the issue could be good news for the private sector, we cannot be complacent, and as we’ve discussed previously, we would advise that those affected remain prepared.