This is the first year in which we will only have a single Budget each year, with this year’s set to take place in the autumn. However, this has not stopped Philip Hammond, Chancellor of the Exchequer, making a Spring Statement. This was used to clarify items from the Autumn Budget 2017, and to announce consultations on new policies. The main points of interest were as follows.

Business Rates
In the last Budget, the Chancellor announced that business rates revaluations would take place every three years in future. This new policy was planned to take effect from 2022, but will now begin in 2021 instead.

The amount of rates that a business pays is dependent on a property’s rateable value. This is determined based on the size and type of business property, as well as the rental market where it is located. Up to now revaluations have only taken place every five years. This has resulted in some businesses being stuck paying higher rates regardless of changes in the local property market that should have caused them to drop. It is hoped that the more frequent valuations will reduce this problem.

VAT
The current VAT threshold is £85,000. Once a business’ sales exceed this figure in any 12 month period, they are required to register for VAT. Businesses dealing mainly with the domestic market face a difficult decision when they approach this threshold. If they have to add VAT to their existing prices, then they risk becoming uncompetitive. If they instead elect to keep their existing prices, then they lose out by having to pay part of their income to HMRC as VAT. As a result, many businesses take the third option of limiting their growth to avoid having to register.

Whilst the VAT threshold is set to stay at this level until April 2020, the Chancellor has launched a consultation into changing the threshold in future. As the UK threshold is already much higher than in many countries across the EU, the possibility of reducing the threshold has been posited. Though this would level the playing field for businesses where all competitors have to charge VAT this could vastly increase administration expenses for small businesses.

Those wishing to express their views can complete this survey or write to [email protected]

Online Selling
The proliferation of online platforms, such as eBay and Amazon Marketplace, has made it easy for anyone to set up an online business with minimal investment.

Unsurprisingly, the Chancellor is concerned that taxable income from these platforms is not being reported properly. In some cases this is simple ignorance, with online sellers not understanding when such activity will make them liable to tax. In others the relative anonymity is being used to evade tax deliberately.

The government is therefore calling for evidence to get a better understanding of how online platforms are being used. The stated aim is to ensure that honest sellers can be better informed of how to meet their obligations, and dishonest sellers can be held to account. The approach by other tax authorities on this matter is also being considered. In Belgium, online platforms are obliged to withhold 10% of income against Belgian citizens’ tax obligations. Depending on the results of the consultation, the UK government may seek to impose similar rules on UK traders.

Further details, along with links to get involved, can be found here

Self-Funded Training Costs
Historically, claiming tax relief for training expenses has been highly limited for both employees and the self-employed.

For an employee to get relief for job-related training, such training must be paid for by the employer. This can either be funded by them directly or reimbursed to an employee that initially pays for themselves. If an employee simply pays for their own training, no matter how relevant to their work, no relief is available.

The self-employed are in a slightly better position, as they can currently claim relief for training to refresh or update an existing skill. However, no deduction is available for acquiring a new skill, even if it is relevant to the ongoing self-employment.

Appreciating that a skilled workforce is generally good for the economy, the government are looking at the possibility of extending the relief available for training.

Further details, along with links to get involved, can be found here

For assistance with these, or any other tax or accounting matters, call Steve Brown at Coleman Webb on 01424 211800 to arrange a free, no-obligation appointment to discuss your needs.

Discaimer: Advice shared in this article is intended to inform rather than advise. Taxpayers’ circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

 

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