Philip Hammond’s first Autumn Statement was delivered today with a focus on preparing and supporting the economy. Over the next few hours the Gabelle team will be working their way through the limited details that have been made available today and contemplating how the tax proposals will impact on individuals and businesses. Our website will be updated throughout the afternoon.
Meanwhile here are the highlights:
- Tax receipts have been lower than expected, which has been attributed to an increase in incorporations and a move to self-employment. The provisions announced in Budget 2016 to tackle the use of disguised remuneration schemes by employers and employees will be extended to tackle the use of disguised remuneration avoidance schemes by the self-employed. A consultation on incorporations and proposed changes was also announced.
- The primary and secondary National Insurance thresholds will be aligned.
- The tax and employer National Insurance advantages of salary sacrifice schemes will be removed from April 2017. Arrangements relating to pensions, childcare, Cycle to Work and ultralow emission cars will not be affected. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.
- The tax advantages for shares awarded under Employee Shareholder Status will be abolished for arrangements entered into on or after 1 December 2016.
- The government reconfirmed its commitment to the business tax road map which sets out plans for major business taxes to 2020 and beyond, including cutting the rate of corporation tax to 17% by 2020.
- From today a 100% first-year allowance (FYA) for expenditure incurred on electric charge-point equipment will be available. The allowance will expire on 31 March 2019 for corporation tax purposes and 5 April 2019 for income tax purposes.
- New measures will be introduced in relation to the VAT Flat Rate Scheme (FRS). From 1 April 2017, FRS businesses must also determine whether they meet the definition of a ‘limited cost trader’.