On 23 November 2016, the UK Chancellor, Philip Hammond, delivered his Autumn Statement to the House of Commons. Practical Law UK analysed the measures announced in real time and has provided a comprehensive resource to explain how UK companies and individuals are affected, as well as in-depth commentary from leading tax practitioners: 2016 Autumn Statement: key business tax announcements.
The first post-referendum Autumn Statement was a relatively quiet affair. Key new measures announced include a proposal to extend the corporation tax regime to all non-resident companies receiving income from the UK, the alignment of the employer and employee NICs thresholds from April 2017, the removal of the tax advantages of employee shareholder shares and a 2 per cent increase in the rate of insurance premium tax.
The Chancellor confirmed that employment termination payments over £30,000 will be subject to employer NICs from April 2018. However, the government appears to have dropped the more controversial aspects of its proposals relating to post-employment payments and expected bonuses. As expected, the restriction of the tax advantages of salary sacrifice arrangements to employer pension contributions, childcare benefits and certain other specified benefits was confirmed with effect from April 2017, with transitional rules for existing arrangements. Restrictions on tax deductibility of interest and changes to the corporation tax loss relief rules will also go ahead as planned, with effect from April 2017.
One of the most significant announcements for tax professionals is that, from autumn 2017, there will no longer be a major fiscal event in the spring and the Budget will take place in the autumn. From winter 2017, the Finance Bill will be introduced into Parliament following the autumn Budget, with Royal Assent expected in spring 2018. 2017 will be a transitional year, with a spring Budget followed by a Finance Bill and then a second Budget in the autumn, followed by a second Finance Bill.
On the whole, the Chancellor seems to have taken a pragmatic ‘watch and wait’ approach to the uncertainty presented by Brexit.
Practical Law’s analysis covers everything from avoidance and evasion, devolution, the environment and oil and gas to private client, pensions, property and VAT. We also asked leading tax practitioners, from firms including Herbert Smith Freehills, Reed Smith, Stewarts Law and McDermott, Will & Emery for their reactions to the Chancellor’s announcements. Their comments can be found here: 2016 Autumn Statement: batten down the hatches?
