In recent days, rumours have emerged that the Government’s intended extension of new IR35 rules to the private sector could be delayed until at least 2020, after Chancellor Philip Hammond failed to address the issue in his Spring Statement announcements on Tuesday 13 March.

Previously, the contracting community was expecting the Chancellor to confirm that an extension of the new off-payroll rules to the private sector would be introduced in April next year.

However, the Chancellor’s Spring Statement contained no updates on the proposals.

Furthermore, an excerpt from policy papers delivered on the day in relation to the new Budget timetable suggests that the Government is effectively ‘running out of time’ to legislate the intended change in time for April 2019.

Commentators have noted that realistically, a consultation needs to be launched within a matter of weeks in order to guarantee enough time for full consideration of the reforms.

Meanwhile, contractors in the private sector are hopeful that the news will see any potential legislative changes delayed until at least 2020.

In addition, commentators have said the Spring Statement’s omission of an update might be indicative that lobbying efforts spearheaded by campaigners and contracting bodies might be having some weight on the Government’s policy-making decisions.

A petition recently launched against an extension of the new off-payroll rules to the private sector has so far gained more than 15,000 signatures. This petition can be accessed here.

What do Betamax, a Donald Trump Board game and the Nokia N-Gage have in common? The answer – they are all exhibits at a brand new museum known as ‘the Museum of Failure’.

Previously located in Sweden, as many as 100 bemusing reminders of forgotten products and failed business ideas have all been shipped to Los Angeles this year to go on display in a truly one-of-kind museum.

The Museum of Failure will contain original examples of long-forgotten product flops such as Colgate-branded lasagne, pink Bic pens ‘aimed at women’, Harley Davidson aftershave and more.

Originally collected by prominent psychologist and innovation researcher Dr Samuel West as part of a research project into corporate success, the museum hopes to provide it‘s visitors with “a new perspective on failure.”

Dr West, who is acting as the museum’s curator, said: “At large, as a society, we are too obsessed with success and underestimate failure.

“I started the Museum of Failure out of frustration – it’s time we accept failure, learn from it, and truly achieve progress.

“I am thrilled to bring the hilarious, yet impactful memories of these colossal flops to Los Angeles.”

The museum’s opening date is yet to be confirmed.

By the time Chancellor Philip Hammond rose to his feet in the House of Commons to deliver the first Spring Statement, he had already offered plenty of hints that this would be a low-key affair.

Gone was the primetime Wednesday slot after Prime Minister’s Questions, gone was the trailing of policy announcements in the days and weeks beforehand and gone was the set-piece photo call with the red box outside Number 11.

This was all carefully orchestrated. Mr Hammond could not have been clearer that there were to be no rabbits pulled from hats.

In line with the move towards a single fiscal event each year, this was to be a straightforward response to the Office for Budget Responsibility’s (OBR) updated economic forecasts, dispensing with the usual drama of Budget Day.

Indeed, Mr Hammond may well be relieved that he does not need to deliver a Budget until the Autumn. A year ago, his first Budget was widely seen as disastrous for the Government, with the Chancellor having to quickly backtrack on heavily-criticised tax rises for the self-employed, providing helpful ammunition for the opposition at the subsequent general election.

Nevertheless, being the first of its kind, the Spring Statement was still something of an unknown quantity and the business community was still curious to see what he might have to say as they waited for the cheers and jeers to quieten in the Commons.

As it turned out, the Chancellor stuck to his guns, saying at the start of the speech that the UK had been unique amongst major economies in making tax changes twice each year. He added the move to a single fiscal event is intended to give greater certainty to business.

• The Economy
• The Public Finances
• Business measures
• Consultations
• Summary

The Economy

There was a strong emphasis on jobs in the Chancellor’s assessment of the state of the UK economy. He noted that the wages of the lowest paid have increased by seven per cent since 2015 and that there are three million more people in work since 2010. He told MPs that the OBR now predicts 500,000 more people will be in work in 2022.

The OBR revised up its GDP growth forecast for 2018 from 1.4 per cent to 1.5 per cent. This is then predicted to remain in line with previous predictions at 1.3 per cent in 2019 and 2020, before rising to 1.4 per cent in 2021 and 1.5 per cent in 2022.

Following the recent rise in interest rates, the OBR now expects that inflation will now return to its two per cent target over the next year, while wages are expected to rise faster than prices over the next five years.

The Chancellor said figures show that the manufacturing sector has enjoyed its longest period of expansion for half a century.

The Public Finances

Moving to the state of the public finances, the Chancellor noted that the UK has now had its first sustained fall in public sector debt for 17 years, saying that this represents a ‘turning point’ for the economy.

Debt as a percentage of GDP is expected to fall from 86.5 per cent in 2018-19 to 77.9 per cent in 2021-22.

Meanwhile, borrowing is now forecast to be £45.2 billion in 2018, £4.7 billion less than had been predicted by the OBR in November 2017.

In the wake of what he was eager to present as positive predictions, the Chancellor said that he is on course to increase public spending at the Autumn Budget, so long as the OBR’s predictions for the public finances are borne out.

Business measures

Mr Hammond said he was keen to support British business, before promising that the next business rates revaluation exercise will be brought forward by one year to 2021, meaning rates will better reflect current rental values.

He also said that there will be a review of how to tackle the problem of late payments, which are seen as an ever-increasing problem for SMEs in particular.

Continuing the theme, and appearing to go against the suggestion that there would be no spending commitments in the speech, Mr Hammond said the Education Secretary will make up to £80 million available to small businesses to take on new apprentices.

Consultations

As had been widely expected, Mr Hammond took the opportunity to announce a number of consultations on the future of the tax system.

Top of the Chancellor’s list was a consultation on ‘Reducing single-use plastic waste through the tax system’. He said the Government is inviting views on how to tackle the problem of plastic waste through the tax system.

He also set his sights on large multinational digital businesses, publishing a position paper on ‘Corporate tax and the digital economy’, including measures relating to VAT.

Maintaining the focus on the digital economy, the Chancellor announced a consultation on the role cash will play. He said the Government will seek views on how to support consumers and businesses to use digital payments, while ensuring those who need to can continue to use cash. The consultation will also seek views on the use of cash in tax evasion and money laundering.

Meanwhile, the Chancellor also said that the Government would consult on extending tax relief for employees and the self-employed who fund their own training.

Although not mentioned in the Chancellor’s speech, the hours following the Statement also saw the Treasury publish a consultation into the VAT registration threshold, suggesting that the current flat threshold disincentivises businesses from pursuing growth.

Summary

One of the biggest advantages a politician has in Government is the ability to set the terms of the political debate and to mark where the dividing lines should fall.

That is what the Chancellor appears to have aimed for with his first Spring Statement. He made a clear statement of intent on the Government’s direction of travel on tax and spending by hinting at spending increases in the Autumn Budget.

Much of the debate in the coming months is likely to revolve around the question of who should benefit from any increases.

So while there were no specifics on tax and spending for businesses to take away from the speech, there were important indications about what may be to come for businesses and the economy.

Hundreds of thousands of taxpayers were handed an automatic penalty earlier this month after failing to file their tax return in time for the 31 January self-assessment deadline, the tax office has revealed.

HM Revenue & Customs (HMRC) urged offending parties to submit their tax returns ASAP to avoid further penalties.

An automatic £100 fixed penalty is issued to taxpayers even if they are just a minute late.

According to the figures, 745,588 of the total 11.4 million tax returns due are still outstanding.

Thousands more taxpayers missed out on penalties by a tight margin. Around 758,000 people completed their return on the last day before the deadline, while 30,348 taxpayers narrowly avoided automatic fines by completing their returns between 11 pm and 11.59 pm on deadline day.

The tax office said it handled 195,260 calls over the course of the day, while more than 92.5 per cent of total returns were completed using the department’s online service.

Angela MacDonald, Director General of Customer Services, said: “It’s really fantastic to see that each year, more and more self-assessment customers are getting ahead of the game and submitting their tax return before the 31 January deadline.

“But we’re not complacent, we want the number missing the deadline to be zero, and we’ll continue to adapt the process to make it easier and simpler for all our customers until every return is in on time and without avoidable errors.

“If you’re one of the small number that missed the deadline, please submit your return now to avoid further penalties. We really don’t want penalties, we just want tax returns.”

A new survey into pay trends claims to have revealed the top-paying industries for contractors.

The research, which was carried out by crowdsourced salary comparison website Emolument.com, suggests that the finance sector tends to offer the highest-value contracts to freelancers, with Risk Modelling and Quant jobs regularly offering a daily rate of £760 and Model Validation jobs paying around £610 a day.

Most financial sector jobs centred around risk management were revealed to be of particularly high value for contractors and freelancers.

Credit Risk Management roles tend to pay a daily rate of around £520, while Operational Risk Management and Risk Analytics roles pay around £505, the research found.

Jobs focusing on mergers and acquisitions (M&A) strategies were also ranked as ‘high-paying’, with an average daily rate of £495.

Alice Leguay, Co-Founder and CMO of Emolument.com, said that an increasing number of British business were seeking contractors who possess “specific skills and competencies.”

She said that many companies were fully “prepared to pay up for a targeted solution” when selecting contractors to tackle specific, specialist tasks within their organisation.

Contractors who have been adversely affected by the collapse of construction giant Carillion earlier this year will be able to apply for Government-backed loans to help plug gaps in their finances, it has been revealed.

The construction giant was placed into compulsory liquidation towards the end of January amid frightening debt levels of around £1.5 billion.

Under proposals backed by the Government, the British Business Bank will support up to £100 million of lending to contractors and small businesses affected by the collapse, while UK Finance will offer an additional multi-million pound package for small and medium-sized enterprises (SMEs) and extra help for anyone who is concerned about their mortgage or credit card payments, it has said.

Reports suggest that industry and Government will continue to work together to ensure contractors, workers and businesses alike are all supported following Carillion’s liquidation.

Recent figures suggest that as many as 30,000 contractors and businesses will be affected by late payments and cancelled contracts as a result of the collapse – while hundreds of workers will be made redundant.

The British Business Bank’s guaranteed lending comes in addition to separate funds created by Lloyds Banking Group, RBS and HSBC in recent weeks in order to extend further support to those affected by the collapse.

Hundreds of thousands of taxpayers rushed to file their tax returns before last month’s self-assessment deadline of 31 January – but not everyone was able to file their return on time.

In many instances, it is often the case that late-payers will offer up some very peculiar excuses to HM Revenue & Customs (HMRC) as to why they were unable to submit their return.

Ahead of the deadline, HMRC published an amusing list of some of the most bizarre ‘excuses’ it had received in recent years over late returns.

These included:

• “My ex-wife left my tax return upstairs, but I suffer from vertigo and can’t go upstairs to retrieve it.”
• “I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house.”
• “I spilt coffee on it.”
• “I’ve been far too busy touring the country with my one-man play.”
• “My business doesn’t really do anything.”

HMRC also unveiled an additional list of unorthodox expense claims it had rejected in recent years.

These included “birthday drinks at a Glasgow nightclub,” “A three-piece suite for my partner to sit on when I’m doing my accounts” and “vet fees for a rabbit.”

HMRC Director General of Customer Service, Angela MacDonald, said: “Each year we’re making it easier and more intuitive for our customers to complete their tax return, but each year we still come across some questionable excuses, whether that’s blaming a busy touring schedule or seeing aliens.

She said that “help will always be provided for those who have a genuine excuse for not submitting their return on time,” but reminded taxpayers that in most cases, those who submit their returns late will need to pay a penalty.

A group of scientists have made bold claims that humanoid aliens are likely to have walked alongside our ancient ancestors in Peru.

The news follows an extensive ‘re-examination’ of the mummified remains of three humanoid bodies found near the Peruvian city of Navca last year, which were previously dismissed as ‘a sick hoax’ by archaeologists and other experts.

The ‘alien-like’ bodies, which have ‘three fingers and three toes’, were originally identified as a hodgepodge of genuine mummified human remains which had been ‘mutilated and re-arranged’ by grave-robbing pranksters.

At the time, organisers of the World Congress on Mummy Studies were so shocked, they took to social media calling for an official enquiry into whether crimes had been committed against archaeology.

Since then, however, a separate group of scientists, which include Peruvian radiologist Dr Raymundo Salas Alfaro, have carried out further tests on the controversial ‘bodies’ – and claim to have reached a very different conclusion.

After carrying out a CAT scan on the remains, Dr Alfaro said that the bone density of the subjects indicated that the “three small specimens” were once “living beings.”

“We can scientifically prove the skull of these creatures have a cranial cavity similar to humans, but they have some strong differences,” he said.

Meanwhile, following extensive DNA tests on one of the subjects, fellow research team member, Dr Konstantin Korotkov, said: “There is no doubt the three fingers and three toes belong to this body.”

A Mexican journalist working for the team added that they almost had “enough evidence to consider this case real.”

Elsewhere, other scientists have indicated that they still believe the ‘bodies’ to be a hoax.

When Chancellor Philip Hammond stepped up to the despatch box, he would have been acutely aware of the pressure he was under.

Some 24 hours before the Chancellor was due to open his famous red box, the Office for National Statistics (ONS) confirmed a wider deficit than anticipated for October.

Ahead of the Budget, business leaders had urged Mr Hammond to get to grips with Brexit headwinds and the UK’s productivity problem, while his party’s own MPs were demanding action on issues such as housing and social care – which many believed had played a major part in the shock loss of the Government’s majority in June.

There was personal pressure too. Some eight months ago, the Chancellor’s previous Budget unravelled at alarming speed (unpopular plans to increase National Insurance contributions for some self-employed workers were dropped within seven days). He could ill afford another flagship policy disintegrating.

All things considered, Mr Hammond had the difficult task of delivering a financial statement which was both radical enough to reset the political agenda and robust enough to avoid a repeat of the spring’s hasty u-turn. Could the Chancellor – whose fondness for figures has earned him the nickname “Spreadsheet Phil” – deliver?

• Economic overview
• Business and enterprise
• Transport and infrastructure
• Personal tax
• Public spending
• Welfare
• Housing
• Tax evasion, avoidance and aggressive tax planning
• Summary

Economic overview:

Opening his address to MPs, Mr Hammond argued that the UK economy continues to “confound those who talk it down” and said that he was determined to invest in technological advances and seize the opportunities on offer.

He acknowledged that ongoing negotiations with the EU were at a crucial stage and with this in mind he would put aside an additional £3billion for Brexit preparations over the course of the next two years. He assured the House that the Treasury was drawing up plans for every possible outcome.

Outlining forecasts by the Office for Budget Responsibility (OBR), Mr Hammond said that the organisation was predicting that another 600,000 people would be in work by the 2020s.

Worryingly, the nation’s productivity has not improved and the predictions for growth have been cut substantially. The OBR now projects growth of 1.5 per cent this year (downgraded from two per cent in March). The forecast for next year is 1.4 per cent, and 1.3 per cent for both 2019 and 2020.

There was better news on borrowing, with Mr Hammond confirming that the forecast for this year is £49.9billion (£8.4billion less than had been projected in the spring).

And as regards the deficit, he said that the OBR figures suggested that the Government was on track to meet its target of reducing the deficit to below two per cent of GDP by 2020-21.

Business and enterprise:

Ahead of the speech there had been no small amount of speculation that the VAT threshold for businesses was to be lowered.

But the Chancellor confirmed that the registration threshold will in fact remain at its current level (£85,000) for the next two years, shying away from a contentious change.

Mr Hammond did hint that he would be considering some form of reform and said he would hold a consultation as to whether the system could be altered to “better incentivise growth”.

In relation to business rates, Mr Hammond said he had listened to concerns from business leaders. With this in mind, he has decided to bring forward the switch from the Retail Price Index (RPI) to the Consumer Prices Index (CPI) by two years. The change will now take effect in April 2018 and is expected to be worth £2.3billion to businesses over the next five years. In addition, the discount for pubs (rateable value less than £100,000) is to be extended to March 2019.

In another boost for businesses, Mr Hammond announced that he would be allocating an additional £2.3billion for investment in research and development (R&D). The main R&D tax credit will be increased to 12 per cent.

These measures were described as “the first strides towards the ambition of our industrial strategy to drive up R&D investment across the economy to 2.4 per cent of GDP.”

Amid uncertainty over the impact of Brexit, the Chancellor also confirmed that the Government would be prepared to replace money from the European Investment Fund if necessary.

Transport and infrastructure:

Mr Hammond said the Government was committed to supporting electric vehicles. Among the measures announced by the Chancellor were a £400million charging infrastructure fund.

As far as diesel cars were concerned, the Chancellor confirmed that vehicle excise duty for new vehicles that don’t meet the latest standards will increase from April 2018. The money raised will be invested in a £220million clean air fund.

£30million will be made available to enhance digital connectivity on the trans-Pennine route and councils will be able to stake a claim to £1billion for high-investment projects.

A new rail card for commuters aged 26 to 30 will enable around 4.5million travellers to get a third off rail fares.

Personal tax:

To cheers from his own benches, Mr Hammond confirmed that Stamp Duty would immediately be abolished for first-time buyers for homes worth up to £300,000 (and on the first £300,000 of properties up to £500,000). There are hopes this will stimulate a slowing property market.

There was good news for the majority of air passengers, with the announcement that from April there would be a freeze on short-haul air passenger duty and long-haul duty for those in economy. The measures will be funded by increasing taxes on private jets.

The threshold for the basic rate of income tax will rise to £11,850 in April 2018, with the higher rate threshold to climb to £46,350.

An increase to the National Living Wage, set to take effect in April, was also confirmed. It will rise from £7.50 an hour to £7.83.

Duties on beer, wine, cider and spirits will be frozen, although tobacco tax will continue to rise at inflation plus two per cent.

Public spending:

More money is to be made available to the devolved administrations (£2billion for Scotland, £1.2billion for Wales and £650million for Northern Ireland). As had been trailed beforehand it was confirmed that both Police Scotland and the Scottish Fire Service would be made exempt from VAT going forward.

Facing increasing demands to address the growing strain on the health service, Mr Hammond outlined plans for an extra £10billion in capital investment over the course of this Parliament. There was also a commitment to make additional money available to improve pay levels for NHS workers.

Welfare:

The introduction of Universal Credit has come in for considerable criticism in recent weeks, with many opposition politicians urging the Government to pause roll-out of the changes.

Mr Hammond acknowledged that many Britons were facing a squeeze on their finances and, in an effort to address the controversy, confirmed that £1.5billion would be spent on efforts to make the system more generous.

Housing:

The Stamp Duty announcement has stolen the headlines, but the Chancellor announced a number of measures apparently designed to show he was taking problems facing the property market seriously.

The Chancellor admitted that young people were concerned about their prospects. While he said there was no “magic bullet” to fixing some of the problems, Mr Hammond gave a commitment that £44billion would be made available over the next five years to address some of the major problems.

It was also announced that councils will be given powers to charge a 100 per cent premium on council tax on empty properties. This is something which a number of local authorities have been lobbying for.

Tax evasion, avoidance and aggressive tax planning:

Hard on the heels of the Paradise Papers controversy, the Chancellor said that HM Revenue & Customs (HMRC) would redouble its efforts to tackle offshore tax avoidance. This strategy is calculated to raise £200million a year.

Summary:

Ahead of any Budget, the media often speculate about whether the Chancellor will pull “a rabbit from the hat”; announcing an audacious policy decided to win favour with voters. The Stamp Duty changes certainly fit the bill and are likely to dominate the headlines in the days ahead.

As far as businesses are concerned, there will no doubt be relief that the changes to the VAT threshold which had been rumoured in advance of the speech failed to materialise.

Critics may say that the Budget otherwise erred on the side of caution, with an emphasis on prudence over particularly radical announcements.

And the Treasury will no doubt be mindful that the OBR forecasts, which suggest the economy is rather weaker than was thought back in March, could mean that challenging times lie ahead.

View official documents and full Statement