With Brexit continuing to cast a fog of uncertainty over the future of the UK, the Chancellor’s spring statement contained few concrete proposals that hadn’t been outlined before. Hammond forged ahead with a positive slant that quoted impressive stats for low unemployment, reduced debt and an increase in wages. With public finances in good shape, he proposed key investments in technology and infrastructure. These investments would, he said, provide “genuine and sustainable” choices for a post-Brexit Britain, allowing the UK to capitalise on future opportunities. Investment in other areas such as housing, clean growth and training skills continued the government’s mission to foster a stronger, fairer economy for all. With this in mind, the Chancellor announced a consultation on digital tax, which will come into effect in April 2020. The tax aims to make technology companies act responsibly towards the public and pay their fair share. This follows a recent Treasury study confirming that the dominance of these digital giants was curbing innovation. Such measures will boost productivity and protect record levels of spending by providing consumers with increased choice. The statement also proposed a review into employment and pay for those on the lowest wages. Although the chancellor presented an optimistic picture, he was keen to stress that economic strength could only be achieved by ensuring a ‘smooth and ordinary exit’ from the EU. Hammond warned that a no-deal Brexit would weaken the economy. For the moment, his hopes that a new deal would achieve cross-party consensus hang in the balance. For all the Chancellor’s predictions, economic growth and investment post Brexit would almost certainly evaporate in the face of a no-deal exit. Meanwhile, the statement proposed reviews into employment tax and a possible simplification of the VAT Capital Goods Scheme. While it was widely hoped that the statement would contain some reference to IR35, the statement touched only briefly on non-compliance measures, instead a consultation document on off-payroll rules in the private sector was issued. The consultation introduced measures to improve communication between all parties in the supply chain by transferring the responsibility for IR35 determination and dispute resolution to the end client.
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