I was not expecting much from Philip Hammond’s first Autumn Statement.
A number of matters concerning additional spending on innovation, research and development, housing and infrastructure was widely predicted in advance.
The few specific tax announcements were a confirmation of previous commitments:
- Personal allowance increasing to £11,500 in 2017/2018 and this will increase to £12,500 in 2020/2021.
- The higher rate tax threshold will rise to £45,000 in 2017/2018 and this will increase to £50,000 in 2020/2021.
- Corporation tax to be cut to 17% by 2020.
There is to be a continued attack on tax avoidance schemes, a tightening up on some salary sacrifice arrangements and an alignment of employee and employer National Insurance thresholds. But it is hard to get too excited about these proposals.
I considered it to be a confident first “mini Budget” by the new Chancellor of the Exchequer.
But he did save the best to the end. He announced that this was to be his last “Autumn Statement.” My initial reaction is that he is resigning. Wow, this was not predicted by the press.
He then went on to explain that the next Budget in March 2017 will be the last spring Budget. From the autumn of 2017, we will move to having one annual Budget.
I was delighted by this announcement as this signals an end to having to get to grips with tax changes twice a year.
Having a Budget in the autumn will mean that tax changes are announced well in advance of the start of the tax year the following 6 April. This gives tax advisers much longer to consider the impact of the proposed changes. Philip Hammond certainly made me a happy tax adviser with this announcement.
Brian King is Dafferns Private Client Tax Partner. Please contact Brian if you have any questions.