Aside from showing some surprising potential as a stand-up comic, Phillip Hammond, Chancellor of the Exchequer, 
gave a measured speech that was shorter and less bombastic in style than his predecessor George Osborne. In it he identified his key themes; addressing the productivity gap, economic imbalance and housing needs.
There’s a lot of coverage ‘out there’ in the media and on business websites so we’re only giving an overview of some of the key tax-related points.
As more detail becomes available we will update the information that we share on our website detailing implications for small businesses and business owners.
Corporation Tax
The Chancellor announced that Corporation Tax will fall to 17% by 2020 and stuck to his commitment to implement a business rates reduction package worth £6.7bn.
Investing in Business
£400 million is to be made available through the British Business Bank to invest in growing innovative firms. The idea being that the funds will be invested in innovative small businesses with potential for growth, to provide the finance that they need to expand.
Universities and businesses with research and development projects will benefit from additional funding. This is to ensure that the UK remains an attractive place for businesses to invest in innovative research. Enchancements to the R&D Tax Credits rules are expected.
Tax avoidance
This Chancellor stuck to the script used in previous years when he stated that some of the expenditure proposed will be funded by reducing the ‘tax gap’ and increasing the amount of tax collected by HMRC. Measures include a clampdown on:
- some salary sacrifice arrangements. This will be effective from April 2017 but with some transitional rules for longstanding arrangements
- abusive use of the Employee Shareholder Status, introduced only a couple of years ago, and largely only being used in tax planning by the well-off
- inappropriate use of the VAT flat rate scheme
In addition a new penalty is being introduced for those helping someone else to use a tax avoidance scheme. Tax avoiders will be hit with significant bills when HMRC defeat their avoidance scheme, this new penalty will ensure that those who help ‘tax avoiders’ will also face consequences.
Litigation and settlement
The government is investing further in HMRC to increase its activity on counter-avoidance and taking cases forward for litigation. This is expected to bring forward over £450m revenue by 2021/22.
HMRC will deploy additional resources to:
- increase the number of cases challenged under the General Anti-Abuse Rule (GAAR)
- expand settlement activity amongst those that have used avoidance schemes
- accelerate Follower Notices
As tax specialists the Bedrock team have considerable experience working with businesses and their accountants to help resolve many of the tax related areas covered in this year’s Autumn Statement. From VAT reviews, R&D Tax Credits through to settlement of tax planning arrangements our team can help. Get in touch today if you’d like to discuss any of the areas mentioned in this blog.
