As we expected, this last Spring Budget was not heavy on new announcements, as much as it was on Philip Hammond’s merciless teasing of the opposition.
There was a welcome deferral of the obligation for businesses below the VAT registration threshold to submit data to HMRC in digital form. But a two per cent staged increase in NI for the self employed and a reduction, only 12 months from its introduction, to the tax free dividend allowance will affect a significant body of traditional Conservative supporters.
The NI increase no doubt indicates a direction of travel which will be followed by the ongoing review of the tax status of the self-employed, who are seen by HMRC as obtaining unfair tax benefits over employees.
Measures to lighten the load of business rate changes seem to have been received as something of a sticking plaster rather than any fundamental immediate reform.
There was relatively little to affect larger businesses, but these already have significant changes to get to grips with including the interest relief restriction and significant changes to the way tax relief is allowed for corporate losses.
Recent Budgets have increased the tax burden on those with very significant wealth, such as owners of prime property and non-UK domiciled individuals. However the 2017 Spring Budget has focused on a wider group, perhaps best described as the affluent. This includes high earning company directors, investors with more than £50,000 in portfolio savings, the self employed and those retiring abroad.
Overall, for most companies it will be business as usual following the Budget today, but with a clear message that doing business in the UK means playing ball strictly within the rules and paying the right amount of tax. The headline corporation tax rate is still on course to reduce to 17 per cent by 2020. The announcements today continue to focus on ensuring large companies comply with tax legislation, with a review of the way HMRC risk assesses large businesses being conducted. The focus on this review will be on ensuring that large companies meet their compliance obligations.
There was an expectation that employers would receive a lot more guidance and clarification of some of the major changes that come into effect from April 2017 around Salary Sacrifice, and also whether there will be any major changes in relation to employment status in particular for workers in the 'gig' economy.
