HomeInsightsNewsAutumn Statement 2016 Response – Menzies LLP

Insights

News // 24/11/2016

Autumn Statement 2016 Response – Menzies LLP

Menzies Autumn statement 2016 response

Chancellor delivers certainty for businesses and confirms plans already set out.

In his Autumn Statement, Chancellor Philip Hammond has listened to the needs of businesses and avoided further tinkering. In particular, he confirmed plans to stick to the road map for reducing Corporation Tax and will go ahead with plans to reform business rates next April.

Scroll down to see more Autumn Statement insight for UK business sectors.

Download Menzies full Autumn Statement Summary

Corporation Tax

Richard Godmon - Menzies AccountantComments from Menzies Tax Partner Richard Godmon.

Bearing in mind the PM’s words earlier this week, it is a bit disappointing that the opportunity wasn’t taken to put in place an even longer-term plan for the reduction of Corporation Tax to 15%, or even lower. This was an opportunity to look beyond Brexit and position the country as a prime destination for investors.

Changes to employee shareholder status (ESS)

The reliefs available to employers under the Employee Shareholder Status (ESS) will be removed on the 1st December 2016. All new schemes set up after this date will be affected.

This takes away some of the flexibility for employers to reward key staff and ring fence skills. If they don’t qualify for an EMI scheme, employers no longer have any real alternative available to them.

£400m to support start-up tech firms

The government wants to encourage talented start-ups to commercialise their activity here in the UK. This means having a long-term strategy backed by the right kind of finance. This funding package to underpin VC investment through the British Business Bank will help to achieve this.

Annual Tax on Enveloped Dwellings (ATED) to increase

The decision to increase the ATED rate in line with inflation will hit homeowners of higher-value properties (worth more than £500,000) and almost all property owners in prosperous areas like London and the South East will be affected. This tax rate has become a lucrative revenue earner for the Chancellor.

Funding for skills

The Chancellor appears to have overlooked the importance of investment in skills altogether. Manufacturers are increasingly concerned about the lack of support for skills development initiatives to support STEM projects and the current lack of resource and issues with the retention of key skilled engineering staff are creating a crisis situation.


Salary Sacrifice

Craig Hughes - Menzies Accountant
Comments from Menzies Private Client Director Craig Hughes.

The Chancellor has announced that certain ‘perks’ commonly offered as benefits in kind to some employees as part of salary sacrifice schemes will lose their tax relief status. Benefits linked to the provision of ultra-low emission cars, pensions, cycle-to-work schemes and childcare will be exempted from the changes.

The Chancellor’s decision to crackdown on salary sacrifice could backfire if employers come under pressure to boost remuneration packages in other ways. Many employers are finding it difficult to retain skilled workers in the current climate and flexible pay and remuneration is an important part of their toolkit.

Salary sacrifice represents a national insurance cost saving for the employer of 13.8% for the value of the salary sacrificed, so the removal of tax relief status for certain perks will be missed and could force more salary reviews.

Anti-avoidance

The government will introduce a new penalty for any person who has enabled another person or business to use a tax avoidance arrangement that is later defeated by HMRC. This new regime will reflect an extensive consultation and input from stakeholders and details will be published in draft legislation shortly. The government will also remove the defence of having relied on non-independent advice as taking ‘reasonable care’ when considering penalties for any person or business that uses such arrangements.

This is a continuation of the Government’s crackdown on tax avoidance and will help to make sure everyone is playing to the same rules. We welcome this scrutiny.

Read Chancellor Philip Hammond’s Autumn Statement in full.


For more information about Menzies LLP or to talk to us about the impact of the 2016 Autumn Statement on your business and personal finances, contact your Menzies Relationship Partner directly or complete our online contact form.


Autumn Statement 2016: Business Sector Implications

Here follows a summary of the headline points following the Chancellor’s 2016 Autumn Statement for each of Menzies’ core business sectors.








For more information about Menzies LLP or to talk to us about the impact of the 2016 Autumn Statement on your business and finances, contact your Menzies Relationship Partner or contact Menzies.

Print Friendly, PDF & Email


RELATED CONTENT
  • Cross-border interests set to drive strategic hiring and the legal sector

    Recently featured in the Law Gazette. A surge in export activity and growing interest in establishing facilities in mainland Europe ahead of Brexit are causing demand for cross-border professional services to soar. In the legal services marketplace, this sharp increase in demand could lead to more strategic hiring. The legal services sector has changed markedly […]

    Print Friendly, PDF & Email
    READ MORE >
  • What you need to know about Financial Services in October 2017

    Financial Services is a strange balance right now with London continuing to cement itself as the world’s centre for financial services, whilst fearing the rug being pulled from beneath it. This month I see more Brexit news (shockingly), a new cash flow tool that could help the UK’s SME’s increase their productivity and Mr Cameron […]

    Print Friendly, PDF & Email
    READ MORE >
  • Brighter Thinking Triumphs at the 2017 TRI Awards

    Menzies are delighted to have walked away with TWO awards at 2017’s Turnaround, Restructuring and Insolvency (TRI) Awards! Shortlisted in four categories, Menzies Business Recovery and Turnaround teams had a twin triumph taking: Winner – Corporate Restructuring Firm of the Year (Up to 10 Licensed Appointment-Taking IPs) Winner – Paul Davies: Turnaround Practitioner of the […]

    Print Friendly, PDF & Email
    READ MORE >