On Tuesday 13 March 2018 the Chancellor will respond to the latest economic data from the Office of Budget Responsibility, also known as the Spring Statement. With better than anticipated economic data and a convention for two fiscal events a year, Hammond is facing calls for big spending and tax announcements.
However, HMT have stressed that the Spring Statement is unlike a Budget (or an Autumn Statement). They have said there will be no immediate or major tax changes or spending announcements. So what can we expect?
It is clear that tax won't be entirely absent from the statement. We can expect consultations on future tax changes and it might not be beyond the realms of possibility to see a roadmap published. Mel Stride, the Financial Secretary to the Treasury, hinted at this in a recent interview when he said, "We’ll be looking at the general direction of travel, indicating things that we’re interested in, the direction that we’re interested in going, spaces we’re interested in moving into on the tax front, perhaps telegraphing the types of things people might expect to see in the Budget in the autumn so that we give people plenty of notice about what we’re looking at and we’re able to get their feedback and responses."
In reality the Chancellor won't have much time for many announcements. In 15 minutes or so he will need to set out the forecast for the UK economy meaning any tax related announcements will play second fiddle. There is a long list of consultations that were trailed at the 2017 Autumn Budget so now might be the time to publish them. A few of them include:
- Entrepreneurs' Relief extension to holdings of less than 5%
- Taxation of trusts
- Knowledge intensive EIS funds
- Off-payroll working in the private sector (IR35)
The Chancellor may refer to consultations that have recently closed, for example, taxing the digital economy. The UK set out its position in a paper in December 2017 and has made some noises about its "potentially preferred route" of a revenue tax on digital businesses.
It is feasible that the government will start to share a few more thoughts on this topic (e.g. a detailed consultation on a digital revenue tax), but after Mel Stride's recent BBC interview on this subject he may have done enough for now to demonstrate their resolve to tackle this. After all, we only have to wait a few more weeks until the EC and OECD publish their digital tax proposals (21 March 2018 and 19-20 April 2018 respectively). It might be sensible to wait and see what the multilateral route has to offer before further unilateral commitments are made.
[ A Treasury spokesperson said: “The Spring Statement is not a Budget, but a response to updated OBR forecasts. Therefore there will be no major tax or spending commitments.