News

Philip Hammond delivered his first Autumn Statement this afternoon and it turns out this is also going to be the last Autumn Statement. The first statement since the referendum to leave the EU, it offered no surprises and no major new tax changes were announced.

Highlights of the Autumn Statement are set out below:

1.    Personal Tax

• Personal allowance will increase to £11,500 as previously announced and will rise to £12,500 by 2020.

• The higher rate threshold will increase to £45,000 next April with plans to increase to £50,000 by the end of parliament.The corporation tax cut to 17% by 2020 will still go ahead.

• A new 3 year savings bond will be offered from spring 2017 which will allow individuals to invest a    maximum of £3,000 with a favourable indicative interest rate of 2.2%.

• The government will be consulting on banning letting agent fees to tenants. They are proposing that instead it will be the landlord who meets all letting agent fees.

• As previously announced in Budget 2016, termination payments over £30,000 which are subject to income tax will also be subject to employers NIC.

2.    Business Tax

• The government plans to phase out the tax advantages of some salary sacrifice arrangements will be phased out from April 2017, with some exceptions such as pensions, childcare and cycle to work schemes.

• The employer and employee national insurance threshold will be aligned from April 2017 at £157 per week.

• Universal credit taper rate will decrease from 65p to 63p per pound from April 2017.

• The National Living Wage will increase as planned from April 2017 from £7.20 to £7.50.

• A review will be undertaken with the aim of building on above the line R&D tax credits.

• A new 100% first year capital allowance will be introduced for those businesses who install electric vehicle charging points.

3.    Other

• Fuel duty will be frozen for yet another year from April 2017.
• Insurance Premium tax will increase from 10% to 12% in June 2017.
• The tax advantages linked to shares awarded under Employee Shareholder Status will be abolished for arrangements entered into on or after 1 December 2016.
• The Autumn Statement will be abolished. Going forward the Budget will be announced in autumn allowing changes to be communicated in advance of the tax year. A new Spring Statement will be introduced to allow the government to respond to OBR forecasts, however no significant fiscal measures are planned to be announced.
• Northern Ireland are set to gain an additional £250m funding which can be spent on infrastructure.
• From April 2017, the amount of investment social enterprises aged up to 7 years old can raise through the Social Investment Tax Relief will increase to £1.5 million.

4.    Anti-Avoidance

• A consultation will take place in regard to the flat Rate Scheme for VAT to prevent the misuse of the scheme.
• A new flat rate percentage of 16.5% will be introduced from 1 April 2017 for businesses with limited business expenses.
• Changes previously announced to tackle disguised remuneration schemes by employers will now be extended to tackle the use of such schemes by the self-employed.