Post Autumn Statement- Points to note
Given an uncertain economy with the prospect of slow growth Chancellor Philip Hammond had little room for manoeuvre when he delivered his first (and last!) Autumn Statement. With the likely costs of Brexit still being considered and to some extent unknown Mr Hammond was perhaps understandably cautious in his approach to the UK finances. As a result there were not a lot of tax changes announced, mainly confirmations of changes previously set out by George Osborne, in an attempt to provide certainty for businesses operating in the UK.
Despite various commitments to large infrastructure projects, there were no changes to encourage entrepreneurs to invest in to develop their businesses – for example no change in the rate of Annual Investment Allowance. Unfortunately the Autumn Statement will herald a Winter of Discontent for landlords, as the unpopular changes relating to finance cost tax relief restrictions will continue to be introduced as before, starting in April 2017.
Points to note
- Renewed commitment to continue to increase the tax free personal allowance and income level at which higher rate tax is payable by 2020. Personal allowance rises to £11,500 from April 2017, and higher rate tax will not be payable on income up to £45,000 (targeted for £12,500 and £50,000 by 2020)
- Changes to the VAT flat rate scheme from April 2017 aimed at so called “limited cost traders” by the introduction of a 16.5% rate. This will render the flat rate scheme utterly pointless for contractors and consultants.
- Confirmation of reduction in rate of corporation tax to 19% from April 2017, and 17% from 2020.
- Increase in the rate of Insurance Premium Tax from 10% to 12% from June 2017 affecting many household and business insurances.
- Changes to the Budget Timetable – there will be two budgets in 2017 in Spring and Autumn, with the ‘Annual Statement’ (re-named Budget) switching to Autumn from 2018 onwards.