29 October 2018
Amanda Tickel, international tax partner at Deloitte, said:
“The Chancellor avoided the word Brexit all but once in his speech, instead referring to the UK’s current status of building a new relationship with our European partners. Recognising the UK is at a pivotal moment in Brexit talks, he flagged the possibility of the Spring Statement being upgraded to a full fiscal event if the economic outlook deteriorated. A headroom of £15bn is still held in reserve, along with other measures to manage the economy. Spending decisions will hold firm regardless if there’s a deal or not. In the meantime, the Government continues to prepare for all eventualities and boosted Brexit spend by an additional £500m for 2019/20, taking total Brexit spend to £4bn.
“Did the Chancellor go far enough to show Britain is open for business? Widening the ePassport service to the US, Australia, New Zealand and Canada is a good move, but the £2bn lending facility for exporters falls short of what’s needed. From a tax perspective, preserving corporation tax at 17% from 2020 does help maintain the UK as an attractive location. However, it was surprising not to see more generous R&D reliefs, given the Prime Minister’s aim for R&D spend to reach 2.4% of GDP by 2027. This will be one to look out for in future – higher R&D tax relief combined with a low corporation tax rate would help stimulate investment in an uncertain period."
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