Chancellor Philip Hammond on 13 March 2019 presented at the House of Commons new Spring Budget. In the light of the problems with the signing of the Brexit deal, the new budget did not reveal significant changes.
Let’s have a closer look on the most important points of chancellor’s speech.
The economic growth in 2019 will be 1.2%. This number is lower compared to the autumn statement, which showed 1.6%. The expected annual forecast will be 1.4% in 2020, 1.6% in 2021, 2022 and 2023.
The deficit of GDP in 2018-2019 will be 1.1%, which is 3 billion pounds less than predicted in the autumn budget.
National Minimum Wage
The government plans to revise the national minimum wage to ensure "a steady increase in wages for millions of British workers." The national minimum wage will rise to 8.21 pounds from April 2019.
Digitalization of tax system
Mr. Hammond asked the Competition and Markets Authority to study the digital advertising market as soon as possible. Last year, he announced that the government would impose a 2% tax on digital services based on the revenue for search engines, social networks and online markets. Consultations on the introduction of a tax for digital services will begin in April 2020.
In April 2019 a new data report system for VAT is introduced. Digitalization will affect all VAT-registered businesses with a turnover above £ 85,000. Businesses will have to keep their records in specialized programs and submit VAT returns to the tax authorities only using MTD-compatible software. The government clarified that during the first year, it will maintain light approach on penalties for non-compliance with the new rules, and those companies that will maximize efforts to implement the new system may not receive them at all during the transition period.
Tax avoidance, evasion & non-compliance (No Safe Havens 2019)
HMRC will continue to tackle tax avoidance, evasion & non-compliance to ensure the correct UK tax is paid, by helping taxpayers meet their obligations and responding appropriately to those who pay less than they should. The UK has made the substantial progress since the last strategy was published in 2014. The UK will continue to champion greater international cooperation to tackle offshore non-compliance.
The Minister of Finance announced the launch of a new £ 3 billion housing scheme with 30 000 houses built as a part of affordable housing programme. The government will also invest additional £ 717 million in a housing infrastructure fund to build about 37 000 new homes in West London, Cheshire, Didcot and Cambridge.
In the light of the increasing pressure in connection with a series of knife crimes in recent weeks, government will additionally invest £100 million to combat this particular type of crime.
From June 2019 Government will start abolishing the need to fill out a paper landing card at the UK entry points (airports and Eurostar terminals) for citizens from the United States, Australia, Canada, South Korea and Japan.
Also Mr. Hammond noted that PhD level roles will be completely exempt from visa caps.