The devil is usually in the detail of any public statement by the Chancellor of the Exchequer. This years Autumn Statement is, therefore, noteworthy in that there is little detail behind the statement. In particular:
- The Chancellor stated that “the OBR has today highlighted the growing cost to the Exchequer of incorporation. This is inevitable when corporation tax rates are set to reduce to 17% while personal income tax rates remain at 45% (and 60% at times for those individuals whose personal allowances are restricted by their income levels). Any changes to the way in which small companies are taxed could impact on the vast majority of trading companies in the UK. It is all very well for the Chancellor to announce that the UK is open for business, but he needs to be supporting the large private business sector in the UK not just trying to attract global multinationals. There is no more detail behind the speech on this, which has been mentioned in the past by Mr Hammond’s predecessor. To say that the government will consult in due course on any proposed changes only goes so far – such consultations generally only deal with matters of detail not matters of substance.
- The proposal to limit the tax benefits of salary sacrifice, which appears to have been leaked to the press has nothing to support the announcement in the speech. The leak would appear to suggest that this has been thought about well in advance so more detail could easily have been provided.
- There is one sentence proposing an extension of disguised earnings provisions to the self-employed and employers but no supporting material. The speech refers to a changes in this year’s Budget and proposes extending them, but the changes were narrowly targeted and could not be extended to the self-employed without first extending the main legislative framework of the disguised earnings rules to them.
- At least the proposal to further limit the tax relief on contributions to pensions, once you have started drawing benefits, does have a brief consultation document to go with it.
For a summary of the main points from this years Autumn statement, take a look at our pdf.