Autumn statement summary
CA Students are in the unique position of learning a curriculum that adjusts itself in response to government decisions; the recent Autumn Statement, which is now to be abolished, made several major announcements that will affect certain aspects of a chartered accountant’s knowledge in the years to come – find out what happened, and what it means.
The statement was delivered by new Chancellor, Philip Hammond, and although much was to be expected, there were a few choice surprises in there as well.
“After the last Budget, we called for a simplification to the budget bonanza the government currently worked to,” said Anton Colella, Chief Executive of ICAS. “Scrapping the Autumn Statement cuts back on uncertainty for businesses which is even more crucial in the current economic and political environment we have found ourselves in over the last five months.
"This is a step in the right direction for the government towards making just two major budget statements across a five year term.”
Chancellor has announced new National Productivity Investment Fund of £23bn #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
ICAS welcomes the announcement of an investment fund: “A new £23bn national productivity and investment fund will help to foster the next generation of leading innovators that the UK is already world renowned,” said Anton. “To quote the chancellor it will mean the government will be investing in today for the economy of the future.”
New penalty for any tax avoidance scheme that HMRC 'later challenges and defeats' #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
Charlotte Barbour, ICAS Director of Taxation, said: “We note with interest that the Chancellor has referred to evasion, avoidance and aggressive tax planning. We believe the pendulum has already swung away from avoidance schemes.
“It would appear that the political drive is widening and we remain concerned that our members must be able to give proper advice to taxpayers. The muddying of waters is not helpful, particularly when new professional guidance has recently been issued.”
Corporation tax confirmed to meet planned target of 17% #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
“The reduction in Corporation Tax rates to 17% will go ahead,” said Susan Cattell, ICAS Head of Taxation (England and Wales). “However, so will restrictions to loss relief for large companies. The changes to losses are complex and will mean affected companies revising their forecasts again.
“Companies may also be deterred from managed risk taking, which is vital for long term prosperity. The announcement states that steps will be taken to address unintended consequences and simplify the administration of the new rules so the details will be important.”
Government cancelling fuel duty rise for the 7th successive year #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
This was good news for drivers, as fuel duty will now be frozen until 2018 – this is now the longest tax freeze in UK history, and is set to save drivers up to a few hundred pounds per year. UK petrol drivers will remain the fifth most fuel taxed in the world, however.
Ban on letting agent fees announced, pensions cold-calling to be targeted next #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
This one will be of exceptional interest to those currently renting – will the ban on fees translate to savings for tenants, or will the costs be passed on in form of higher rents? History tells us that it’s most likely the latter option.
Employers and employees using salary sacrifice schemes will pay the same as everyone else from April 2017 #AutumnStatement— ICAS (@ICASaccounting) November 23, 2016
This move is designed to claw back tax and national insurance contributions, which were reduced through salary sacrifice schemes such as healthcare, gym membership and other ‘perks’. There is a strong belief by the Government and HMRC that benefits-in-kind should be provided by employers when they come at a cost to the Exchequer.
What are your thoughts on the statement? What will benefit you most, and what do you wish was staying or going?