There was a distinctive shift in the tone of Chancellor of the Exchequer Philip Hammond’s first Autumn Statement from that of his predecessor, George Osborne. [Read our summary of the announcements]
Anti-tax avoidance and Anti-tax evasion previously focused on high net worth individuals, large corporates and multi national businesses. Hammond announced several measures to tackle individuals operating under an ‘employment nature’ who are not paying the full rates of tax or National Insurance.
This is clearly a clamp down on individuals who are working but are not on a payroll; on personal services companies and on salary sacrifice schemes used for aggressive tax planning purposes.
There is a softening of universal tax credits, an increase in the minimum wage and a special fixed rate 3 year fixed term savings bond for low income savers paying an above average interest rate. This account, operated by NS&I will pay an interest rate of 2.2% pa on savings up to £3,000. The Chancellor reaffirmed the manifesto pledge to increase the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this parliament.
These moves may be a reflection of Hammond’s quasi-socialism in aiming to redistribute wealth by ensuring that anyone with a job is paying their due whilst giving a helping hand to the low income group given the unfortunate collective term of the ‘just about managing’ (JAM) by the Prime Minister.
The Chancellor pledges to continue to uphold the Government's aims to support business growth and innovation in the UK by introducing funding for exporting and for growing technology companies. He wants to ensure the UK is competitive as a location for businesses as well as aiming to make the UK a leader in the provision of 5G and "full fibre", the next generation in fibre optic cable.
Over the next few weeks the detail will be revealed and we will be able to assess the real impact of the announcements on both individuals and businesses.
Meanwhile, if you have any questions, please get in touch.
To read our summary of the 2016 Autumn Statement please click here