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Autumn Statement 2016

Philip Hammond today presented his first Autumn Statement to the House of Commons, and amongst his more prominent announcements was that it would also be his last! Rather than signalling one of the briefest ever occupations of the post, he has proposed that there will be one major fiscal event each year by moving Budget Day to the autumn.

It is to be hoped that this measure, by making major announcements well in advance of a new tax year, will help provide greater clarity, as well as more time for detailed parliamentary debate. The change will take place in 2017, meaning that next year will see two Budgets, and accompanying Finance Bills.

These procedural issues aside, the Statement did not produce many new announcements of immediate note on the tax front, but the following points may be of interest:-

  • The Government has reaffirmed its commitment to increase the personal allowance up to £12,500 by the end of the current Parliament.
  • The National Insurance thresholds for employers and employees will be aligned.
  • Subject to some very important exceptions, the tax and employer National Insurance advantages of “salary-sacrifice” schemes will be removed from April 2017.  The exceptions will include pension provision, childcare, and the Cycle to Work scheme.  However, 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.
  • Rules announced in the 2016 Budget to tackle the use of disguised remuneration schemes by employers and employees will be extended to tackle the use of similar schemes by the self-employed.
  • Consultations will be undertaken on the subjects of methods of remuneration, benefits-in-kind and employee business expenses.

Furthermore, the planned changes to the taxation of non-doms which were announced last year are to have effect from 6 April 2017 as previously outlined.

For further details of these proposals, or for more general advice on any tax issue, please speak to your usual Saffron contact, or get in touch via info@saffrontax.com.