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With the Chancellor promising to end the twice-annual rigmarole of tax changes, we ask what—if anything—lawyers can expect in the forthcoming Spring Statement.
Andrew Goldstone (AG), partner, at Mishcon de Reya
Laura Charkin (LC), partner, at Goodwin
Paul Bricknell (PB), partner, at Kuits Solicitors Manchester
AG: If Philip Hammond is to be believed, tax advisers can all go home early as he’s said he won’t be making any tax changes. If he sticks to his word, there’s nothing to predict.
LC: It seems unlikely that the Chancellor will announce any major new tax initiatives in the Spring Statement, given his move to abolish the previous system. How many years that resolve lasts for is a different matter of course, politicians do love a new policy announcement.
Businesses will welcome the change though, it being one of the very few areas where the government seems to be trying to reduce the burden on businesses, who are having to deal with the ever increasing complexity of the UK tax system in the face of Brexit and the OECD BEPS initiative. It is a small ray of light on an otherwise very foggy day.
PB: I do expect the Chancellor to stick to his promise of a single fiscal event in Autumn 2018. Taxpayers need consistency with the rules to enable them to structure their affairs in a legal but tax-efficient manner. Constant tinkering leads to inertia, which is not good for business or the economy.
I anticipate that the Spring Statement will be used to announce policy reviews and consultations, rather than changes. It is critical that these reviews and consultations do not similarly create inertia. In addition, the Chancellor must balance taxation with continued investment from outside the UK. The attack on overseas residential property investors should not extend to commercial property as inward investment is good to grow the availability of office and industrial space.
AG: Yes, I do think he’ll keep it short and sweet this time, otherwise it’s yet another embarrassing U-turn. But who knows about future Spring Statements—Chancellors seem to have an irrepressible fondness for tinkering. The deluge of new tax legislation over recent years, with major tax changes being announced twice a year, serves nobody well. It’s bad for taxpayers who feel the goalposts are always moving. It’s difficult for parliamentary counsel, who end up having to draft complicated legislation in a hurry, leading to loopholes and mistakes—even professional tax advisers, who make money from the change, will welcome some stability.
The right way is to announce a proposal, consult fully and not rush it. That way, new tax rules are properly thought through and well drafted. Yes, a few taxpayers might act quickly before the shutters come down, and the Treasury could lose some cash, but the risks of that happening are usually exaggerated. What’s far more important is that tax policy decisions are translated into technically robust legislation, without ambiguities, omissions or unintended consequences. If the Chancellor is serious about creating increased tax stability by sticking to a single annual Budget, that deserves a big thumbs up from tax advisers and taxpayers alike.
New consultations that have been promised for spring 2018, and that might therefore be published with the Spring Statement, include:
New consultations that have been promised for an unspecified time in 2018 include:
Consultations that were published in December 2017, and that may therefore have responses published at the time of the Spring Statement, include:
Interviewed by Julian Sayarer. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
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