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Autumn Statement 2016: Cassons react

Chancellor Philip Hammond delivered his first Autumn Statement to parliament this afternoon. Tax Partners, Colin Tice and Helen Cowley, give their reaction to the announcement.

Colin Tice, Taqx

Colin Tice, Tax Partner.

"The initial reaction was gratitude that the Autumn Statement was to be abolished! Unfortunately this just means that in future the Budget will be in the Autumn. The Spring Statement will be a response to the Office for Budget Responsibility forecast. This is more than changing things around, as the Government will in future have only one major announcement of tax policy changes rather than two and with more time for consultation until any changes take effect.

"The North West will benefit by investment of £400m into the Northern Powerhouse Investment Fund which in conjunction with Local Enterprise Partnerships (LEPs) and the British Business Bank should release £1 billion of venture capital funding into local smaller businesses, starting in early 2017.

“The Chancellor also announced several measures which are aimed at addressing the productivity barriers across the UK, including that the Government will award a total of £1.8bn to Local Enterprise Partnerships (LEPs) across England, of which £556m will go to the North.

“This funding of local infrastructure is intended to improve transport connections, unlock housebuilding, boost skills and enhance digital connectivity.

“However, with 12 LEPs in the North, we are uncertain about how much of that money reaches Lancashire. We will likely discover in early January what is allocated to individual local enterprise partnerships.

“It is difficult to say at this point whether Lancashire will see any real benefit or not.

"Overall, Government debt must remain of concern as we approach Brexit with continued increases in borrowing forecast for the foreseeable future.

Helen Cowley, Tax Partner

Helen Cowley, Tax Partner

"The Chancellor began his Autumn Statement with the message that the UK must remain resilient on Brexit through fiscal discipline and improved productivity.

The Government aims for the UK to become a leading destination to do business and intends to reduce corporation tax to 17%, as previously announced, by 2020.  It is also anticipated that business rates will reduce collectively by £6.7 billion over the next 5 years.

The tax-free personal allowance will increase to £11,500 in April 2017, with the stated intention of further increases to £12,500 by the end of the Parliament.

Such reductions in tax payments will be funded by further Government borrowing, which is forecast to increase for the foreseeable future.

One rather significant announcement that will affect virtually every business and household is a rise in Insurance Premium Tax (IPT) to 12% from June 2017.  Whilst this only represents a 2 percentage point increase on current rates of 10%, it is actually a 20% increase, and this has doubled since October 2015 when the rate of IPT was only 6%.  The Government claims that this is a tax on insurance providers but in reality the cost is likely to be borne by the insured."

Click here to read our full Autumn Statement report

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