Chris Sanger, EY’s Head of Tax Policy, comments:
“Today’s Spring Statement provided much for discussion, but beyond this it may also have signalled a fundamental change in the approach of the Treasury. Whilst Rishi Sunak is not the first Chancellor to promote a “Tax Plan”, George Osborne’s Corporate Tax Roadmap and Philip Hammond’s “Business Tax Roadmap” both sought to get out of the way of decision making and leave the choice on what to invest to business.
“Instead, the Chancellor, having increased the corporate tax rate from next year to 25%, is taking a far more interventionalist approach. We can now expect to see more targeted policies, with the prospect of the Treasury using the tax system to “pick winners”, as well as greater use of “hypothecation” or earmarking of taxes to increase their public acceptance.
“Faced with a situation where productivity increases have been elusive, the Chancellor is steering his own new path. With the consultation coming on the Tax Plan, we all now have the opportunity to give our own views.”
For all our Spring Statement analysis visit our dedicated web page.