The status and success of any company rests on the shoulders of a shrewd accountancy team, and the ability to reap the benefits – and minimise the risks – associated with ongoing changes in legislation is key to the personal success of any accounting professional.
Aside from the headline announcement that UK businesses are now set to become the lowest corporation tax rate payers in the G20, Philip Hammond’s first, and only, Autumn Statement offered CFOs and their teams plenty more to consider as 2017 strategy is finalised.
Looking at employee remuneration specifically, Hammond outlined series of changes to the tax system. The Government has pledged to scrap income and capital gains tax relief for shares awarded under Employee Shareholder Status (ESS), just three years after the scheme was introduced, due to evidence suggesting it is mainly being used for tax planning. The Chancellor also announced the removal of tax and NI benefits for salary sacrifice schemes, with the exception of childcare, cycle to work and ultra-low emissions cars schemes and pensions. The Government’s previous pledge to up the personal allowance and higher tax rate threshold still stands.
Employer and employee NI thresholds are also due to be aligned – the insurance premium tax will rise to 12% from 10%; while the taxation of people working in different structures is set to be equalised.
Looking at business investment, Hammond announced that an extra £400m would be injected into the British Business Bank to then be placed with venture capital funds. It’s hoped this will unlock £1bn of new finance for growing firms and encourage more to resist the temptation to sell out earlier in search of a big payday.
One thing the Autumn Statement didn’t offer was an update on the Making Tax Digital consultations, which is unsurprising when you consider that the proposals received over 3,000 responses by the consultation deadline just two short weeks ago. The Government has, however, committed to publishing a response in January. We await the outcome with bated breath.
While Hammond’s announcement was designed to be pro-business in a time of market uncertainty, only time will tell if it offers financial planners the level of confidence they need to push on with short and medium term strategies for investment. One thing is for certain, there’s enough here to keep management accountants on their toes until the first of next year’s Budget’s this coming spring.
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