The new Chancellor of the Exchequer, Phillip Hammond, has given his first Autumn Statement, which included fewer big announcements than we came to expect from his predecessor.
In the post-Brexit landscape, he was keen to herald, and support, the fast growing, high employment, economy which he boasted was confounding commentators. To this end, the Business Tax Road Map continues as planned, with a 17% corporation tax rate planned for 2020 and a simplification of the Substantial Shareholdings Exemption to help make the UK an attractive place to establish headquarters of global businesses.
There was a focus on “innovation” with £2bn per year being promised for research, development and innovation from a new Infrastructure and Innovation Fund. And in a nod to those who are “Just About Managing”, the Chancellor reconfirmed the Government’s commitment to have a tax free personal allowance of £12,500 and a 40% tax threshold of £50,000, and made headway towards these limits by announcing an increase to the personal allowance to £11,500 from April 2017.
Salary sacrifice schemes have been added to the list of abusive tax practices so – with some exceptions – the benefit of these will be stopped from April 2017; employers already struggling to recruit and retain talent have lost one way of making a salary package more flexible and attractive. In addition, we were warned that the Government would look at “incorporations” and their contribution to the tax gap, so entrepreneurs and property investors who have rushed to take advantage of the low rate of corporation tax and other advantages of companies may live to regret their decision.
Notable omissions from the speech were concessions to the proposed Making Tax Digital initiative, any relaxation to Stamp Duty Land Tax, and any material simplification of the tax system. All in all, there were no huge surprises, but there were warnings of future consultations and so as ever there are plenty of changes in the pipeline.