Spring statement – nothing to see here

houses-of-parliamentIt was previewed as being a low key affair and Chancellor Philip Hammond’s Spring Statement certainly lived up to that billing.

Those who weren’t expecting much were not disappointed and for many businesses already battling with a raft of legislation and used to the double-whammy of two Budgets a year in the past, that will have come as a welcome relief.

As widely anticipated there were no announcements of any tax changes – we will all have to wait until his Autumn Budget for any indication of those.

However, there were announcements from Mr Hammond of more “consultations” which could impact on small businesses further down the line.

The subjects under the microscope range from finding ways of getting more tax from international digital businesses to a proposal for extending entrepreneurs’ relief to some shareholders whose holdings drop below the qualifying five  per cent level.

The Chancellor has also been mulling the possibility of lowering the VAT threshold – so again watch this space.

Some commentators have interpreted the statement as indicating that an end to austerity is now in sight – they believe the government is now looking at increasing spending. Again, watch this space.

Meanwhile, the key changes to for the fast approaching new tax year have already been announced and passed into law.

So April will see the usual changes to the income tax rates and allowances as well as National Insurance contributions.

This year there will also be a cut in the dividend allowance from £5,000 to £2,000.

The tax increases on company cars may look relatively modest, but their cumulative impact could be significant for some people.

Many employees will also see the extra net income from the tax changes eaten up by their higher minimum auto-enrolment pension contributions.

The lifetime allowance for pensions has been raised and there will be changes to employee termination payments and the new rules for enterprise investment schemes.

To discuss any of the issues that have been raised in this article or any aspects of tax please contact either myself or my colleague Kevin Taylor on 01772 4440000.

 

As Senior Tax Consultant at WNJ I have expertise in trusts and work on a wide range of other tax matters from partnership structures, corporate transactions to Enterprise Investment Schemes. I also advise on capital gains tax and inheritance tax.