Thoughts before the Autumn Statement

 

By the time you are reading this, the new Chancellor Philip Hammond may, or may not have delivered his first budget, and although our Tax Director Mary Tierney is pretty good at predictions, the way things have been going either side of the Atlantic this year we thought it best to keep our powder dry at this stage. 

What is certain, however, is that government are continuing to push for increased tax collections from old tax planning arrangements and HMRC are continuing to talk tough. George Osborne’s last budget pencilled in additional tax receipts of £9.7 billion over the next 5 years from anti-avoidance and evasion measures. We wait to see how successful this will be, and one relatively safe prediction would be that this number is expected to increase rather than decrease in the current climate.  One area of concern we are seeing more and more is the imposition of measures that were introduced as “anti avoidance” to increase the tax take on normal commercial transactions that the rules were not originally designed to catch. 

Whilst the old tax planning arrangements impact only a small minority of tax payers, the main requests from the majority of us continue to be for a simplified tax system, with long term stability.  We await the introduction of digital tax accounts with trepidation.  

Recent governments have used the “Annual Investment Allowance” as a lever to stimulate and encourage growth, with the allowance moving from a miserable £25,000 in 2012 to £500,000 in 2014/15 and falling back to £200,000 from the start of 2016. The size and regularity of these movements have not helped businesses plan effectively and more certainty over the size and longevity of this relief would be good news. Whatever the Chancellor chooses to do in this area, this relief will continue to be welcome in these uncertain times. 

But what of the headline rate of corporation tax? At 20%, the rate is currently the lowest in the G20, and is set to reduce to 17% from April 2020. The impact of Brexit has been relatively benign (so far) in the UK, and we wait to see how the US economy will react to the Trump victory, but again, stability and certainty over the future policy, is critical at this present time. 

Please contact Mary Tierney at mary.tierney@bennettbrooks.co.uk if you have any tax issues or concerns.