Last week’s Autumn Statement delivered no big surprises. The Chancellor confirmed a commitment to measures announced by his predecessor ensuring certainty and fairness for taxpayers. The devil is in the detail and we will have a better understanding of the Government’s thinking when draft legislation is published in early December.
Perhaps the biggest surprise was the Chancellor’s announcement that his first Autumn Statement will also be his last, with the Budget moving to the autumn from 2017. This will allow for greater scrutiny of draft legislation before it becomes law.
Infrastructure spending aside, there was plenty in the Autumn Statement that will directly impact on you – the businesses, employers and individuals in our community.
Planned increases in the income tax personal allowance from £11,000 to £12,500 and higher rate income tax threshold from £33,000 to £50,000 will go ahead. From April 2017, savers will benefit from an increased annual ISA limit of £20,000.
A tax-free allowance of £1,000 for property and trading income will be introduced which will reduce the burden on those receiving small amounts of income, for example from short-term lets or internet selling.
Changes will be made to bring permanent UK residents and UK residential property owned directly or indirectly by them within the charge to inheritance tax. Importantly, there were no changes to the additional “residence” inheritance tax-free allowance on death due to take effect from April 2017 were announced.
For Businesses and Employers
The Chancellor confirmed the Government’s commitment to the business road map introduced in Budget 2016, including the planned reductions in corporation tax to 19% in April 2017 and to 17% by April 2020. Changes limiting the use of losses by profit-making companies will also go ahead.
From April 2017, tax and National Insurance Contributions (NIC) advantages from salary sacrifice arrangements will be restricted. Salary sacrifice arrangements relating to pension contributions, childcare, cycle to work schemes, annual leave and ultra-low emission company cars will be protected but others, including mobile phones, medical benefits, car parking and discounts on own goods, will be subject to income tax and NICs. Transitional provisions will protect flexible benefits taken before April 2017 until April 2018, with company cars, accommodation and school fees protected until April 2021.
Class 2 NICs are being abolished and the regime simplified by introducing revenue-raising measures. People operating in the public sector through a personal service company will be subject to reforms and significant changes to the taxation of termination payments and other employee benefits are expected next year.
Rural rate relief is being aligned with small business rate relief to 100%.
Fuel duty has been frozen but a higher rate of insurance premium tax potentially means increased premiums if the insurance companies pass the cost on.
In keeping with his predecessor, measures were announced to tackle tax avoidance and evasion including changes allowing taxpayers to disclose and correct historic errors or omissions as well as extending the existing tax scheme disclosure regime to include VAT and other indirect taxes.
All in all, there is something for most of us to think about but nothing that can’t wait until 2017!