The Chancellor has published the first annual Spring Statement.

This does not include significant tax or spending announcements (which will be reserved for the Autumn Budget) but does provide an update on the nation’s finances as well as details of new consultations, most notably on the VAT registration threshold.

VAT registration threshold: call for evidence

The Government believes that the current design of the VAT registration threshold may be dis-incentivising small businesses from growing their business and improving their productivity. This was noted by the Office of Tax Simplification in their review of VAT published last year, who recommended that the Government examine the current approach to the VAT threshold.

A new call for evidence will explore the effect of the current threshold on small businesses, and will then go on to consider different policy options, and ask questions on whether those options could better incentivise growth. The deadline for responses is 5 June 2018 and all of the consultation questions can be found here.

Business rates

At Autumn Budget 2017 it was announced that business rates revaluations will take place every three years, rather than every five years, following the next revaluation. This makes bills more accurately reflect the current rental value of properties. Spring Statement 2018 announces that the next revaluation, currently due in 2022, will be brought forward to 2021. This will mean businesses can benefit from the change to three-year revaluations earlier, with the first taking place in 2024.

Reducing single-use plastic waste through the tax system

The Government is seeking views on how best to use the tax system to encourage the responsible use of plastic. Some of the money raised from any tax changes will be used to encourage the creation of new, greener products and services. In addition, £20 million from existing budgets will be given to businesses and universities to research ways to reduce the impact of plastics on the environment. Charities currently benefit from the money collected on single use plastic bags. The deadline for responses is 18 May 2018.

Corporate tax and the digital economy: position paper

The Government has identified the need to ensure that the corporate tax rules respond to the modernisation of the economy and deliver appropriate results for digital businesses that generate value in unique ways. The Government’s updated position paper builds on the paper published at Autumn Budget, reflecting feedback from stakeholders and setting out in more detail how the Government thinks this challenge can be solved. CTG is supportive of the Government’s efforts to tackle tax avoidance but always requests that measures are targeted and do not result in unintended compliance burdens for charities.

The role of cash in the new economy

Digital technology has changed the way people shop, sell, and save. While cash will continue to be an important method of payment, more people are moving towards digital payments every year. The Government is seeking views on what more it can do to:

• support people and businesses who use digital payments
• ensure that those who need to are able to pay with cash
• prevent the use of cash to evade tax and launder money.

The deadline for  responses to the consultation is 5 June 2018.

Alternative method of VAT collection – split payment

The Government has published a consultation seeking views on possible options for how a potential split payment mechanism could work to combat online VAT fraud. The Government remains of the view that a feasible split payment mechanism for VAT, which would allow VAT to be extracted from online payments in real time, would help to reduce the VAT gap. The deadline for responses is 29 June 2018.

The proposals are targeted at overseas sellers to UK purchasers via online marketplaces, but the consultation includes the question: “Do you think the scope of split payment should be limited to overseas sellers, or should HMRC expand the scope to include online UK businesses?”

VAT, Air Passenger Duty and tourism in Northern Ireland

The Government wants to support the economy in Northern Ireland, and to help build on the growing success of the tourism industry there. Following concerns about he impact of VAT and APD on tourism in the UK, and particularly in Northern Ireland, the Government has launched a consultation on potential options

The consultation document notes that the Government allows several zero VAT rates, a VAT exemption on admission to cultural attractions managed by public bodies or that are not-for-profit, a VAT refund scheme for museums and galleries among other benefits. As part of the consultation, the Government is interested in the extent to which these features benefit the tourism industry in Northern Ireland, and how they can help build on the success of the industry in the future. One questions asks: “What impact do current VAT reliefs, exemptions and refunds have on the tourism industry in Northern Ireland? Are they a significant benefit?”. Responses to the consultation are due by 5 June 2018.