PHILIP Hammond’s first major set piece was the delivery of the 2016 Autumn Statement. This was the biggest announcement since the vote to leave the EU in June yet there were very few tax changes. Most likely, we will see much more significant change next year.
Part of this is to do with the announcement that there will be two Budgets in 2017! Thereafter, we will only have one major fiscal announcement; the Autumn Budget will contain the major changes while the Spring Statement will be a brief overview of progress.
This is good news when it comes to business planning as it should ensure there is sufficient time to consider key tax measures before they come in to effect.
Recently, we’ve had major changes coming in to effect before the legislation has been finalised so this switch should enable greater certainty when it comes to planning.
Of the changes that were made, here are some of the items I felt were most significant.
* Employee Shareholder Status (ESS) was a flagship policy introduced in 2013 allowing an employee to swap employment rights in exchange for shares which came with significant tax reliefs. Having cut the capital gains tax exemption on these shares to £100,000 in March, the Autumn Statement announced that most tax benefits associated with ESS shares would be scrapped altogether.
* Salary sacrifice schemes will only be effective for a limited number of benefits: employer pension contributions, employer-provided childcare, cycle to work and ultra-low emission company cars. This will take effect from April 2017 but with some transitional allowances. For other tax-exempt benefits, the tax-exempt status will be lost where the benefit is provided in exchange for salary sacrifice.
* Following consultation on the taxation of partnerships earlier in the year, draft legislation is to be published for technical consultation. This will focus on the way in which profits and tax add backs are allocated between partners. If you’re in a partnership then this could be very significant so I would recommend reviewing these changes when the legislation is published.
* Making Tax Digital (MTD) was one of the major announcements of 2015 yet we heard nothing on it in the Autumn Statement. MTD is scheduled to take effect from April 2018 for unincorporated businesses; we await the Government’s response to the recent consultation which is due to be published in January 2017.
If you would like to discuss how many of these points will affect you, contact Nathan Sutcliffe, Tax Manager on 01604 624011 or email You can also obtain a copy of MHA MacIntyre Hudson’s Autumn Statement report online at www.macintyrehudson.co.uk/autumn-statement-2016