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‘Stable Brexit platform for a global Britain’ as Spreadsheet Phil delivers last Spring Budget

The Spring Budget 2017

 

Chancellor Hammond or “Spreadsheet Phil” as the Treasury call him, quietly delivered his 2017 Spring Budget today with a spring in his step and mischief in his face as he taunted the Labour benches opposite. He reminded me of a latter day Robin Hood, taking a little from the rich and giving a little to the poor(er) members of society. Not a bad ideal you may think, but does his tinkering go far enough?

 

I prefer him imitating Robin Hood rather than being the Sheriff who would take taxes from the vulnerable for selfish gain. In this Spring’s Budget nasty surprises were noticeably absent as Mr Hammond basked in the reflected glory of improved economic growth numbers recently published by the Office of National Statistics.

 

No doubt weaker sterling has resulted in inflationary pressures and, to protect living standards, more pounds are required in the pockets of UK citizens. Hammond believes his Budget addresses this balance but that view is not shared by the leader of the Opposition.

 

A cautious Budget; it boasts of fairness and to “levelling the playing field”, specifically with reference to National Insurance contributions from the self-employed rising closer to those of the employed. The Government’s strategy of closing the tax gap (the difference between the taxes that should be collected and those which actually are) seems to be working. A continued hard line on all forms of tax evasion and avoidance, with stronger compliance tools to police best practice, is hard to criticise.

 

Faced with ongoing criticism on the timetable and a paucity of clarity surrounding the introduction of the public sector off-payroll (IR35) changes in 4 weeks’ time, it was good to hear that the implementation of Making Tax Digital for some smaller businesses has been relaxed. Nevertheless the public sector changes are still expected to result in procedural and contractual chaos and HMRC’s digital status assessment tool ‘ESS’ will need a thick skin.

 

Flexible workers, contractors and freelancers who comprise the ‘gig economy’ feel with some justification that they have been ambushed again with reductions in the dividend allowance, Flat Rate VAT changes penalising ‘low cost traders’ and public sector IR35 reforms, all of which are causing chaos and extra cost in the temporary worker supply chain. There is no doubt that the taxation differences between the employed and the “self-employed” (including single director companies) require harmonisation, but any changes necessary to bring tax treatment in line with new economy ways of working must be explored and considered thoroughly and not as a knee jerk response to abuse by an unscrupulous few. Flexible workers may feel bruised but if the Sheriff had written the script then far more radical changes can be imagined.

 

Consistent pleas for patience and reflection from stakeholders have fallen on deaf ears and many commentators believe that the outcome is unlikely to deliver the returns that HMRC expects. I do hope that in balancing his books and sharing the wealth around Robin has not prematurely spent the money from the flexible workforce. Otherwise I think the job of collecting it will go back to the less amiable Sheriff and then it will be goodbye to fairness and simplicity.

 

Call me old fashioned, but I doubt next Autumn’s Budget will be quite so Robin Hood-ish.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.