Tax changes are now only being made at the Budget, so although not a fiscal event, the Chancellor used the Spring Statement to make a series of announcements.

Business

The next business rate revaluation will take place in 2021 and every three years from then.

Calls for evidence have been issued:

• by the Department for Business, Energy and Industrial Strategy for evidence on how to help Britain’s least productive businesses close the gap to the top performers
• on the VAT threshold, focusing on whether the threshold stifles business’s ambitions to grow, and the bureaucratic burdens and policy solutions to the problems identified 
• by HMRC on the role of online platforms in ensuring tax compliance by their users
• on the role of cash and digital payments in the new economy, noting the rise of digital payments and the decline in the use of cash, in particular small denomination coins. Questions include whether the current mix of eight coins and four banknotes is adequate, and what the profile of cash users is.

Consultation were announced:

• to build the government’s understanding of the capital gap that knowledge-intensive companies face, and to seek views on the best way of closing that gap 
• on reduced Vehicle Excise Duty for the least polluting vans
• on off-payroll working

Skills

Announcements included:

• £80m funding from the Department for Education to support businesses employing an apprentice
• A consultation on the way the tax system supports self-funded training by employees and the self-employed
• The Office for National Statistics working with government to develop a new measure of human capital to better understand the economic payback from investing in people

Minimum and Living Wage

The Chancellor reminded us that as of April 1st 2018 the National Living Wage will rise from £7.50 per hour to £7.83 per hour.

The National Minimum Wage also increases as of April 1st 2018. By age group this works out as:

• an increase from £7.50 to £7.83 for those 25 and over
• an increase from £7.05 to £7.38 for those 21-24
• an increase from £5.60 to £5.90 for those 18-20
• an increase from £4.05 to £4.20 for those 16-17
• an increase from £3.50 to £3.70 for apprentices

These measures were first announced in the Autumn Budget 2017.

Housing

Following the announcement of an Oxfordshire Housing and Growth Deal at the Autumn Budget, the Chancellor announced a West Midlands Housing Deal, offering £350m to develop 100,000 new homes by 2030/31.

On house building, and ahead of his ‘build out’ review, Oliver Letwin presented preliminary findings in a letter published by the Chancellor. Oliver Letwin argues “the fundamental driver of build out rates once detailed planning permission is granted for large sites appears to be the ‘absorption rate’ – the rate at which newly constructed homes can be sold into (or are believed by the house-builder to be able to be sold successfully into) the local market without materially disturbing the market price”, ahead of shortages of labour, materials or capital or the speed of delivery of transport infrastructure.

Pollution

There was a call for evidence on the ‘plastic problem’ to explore how changes to the tax system, or charges, could be used to reduce the amount of single-use plastics we waste in order to deliver better environmental outcomes.

For more on the Spring Statement

Although no Red Book was produced, the Chancellor did prepare a written statement of the Spring Statement.

The Office for Budget Responsibility’s new Economic and Fiscal Outlook can be found here.

Photo Credit: Philip Hammond - Raul Mee (EU2017EE) - CC BY 2.0