Frequently Asked Business Question:
I have read that last week’s Autumn Statement may be the last and the government are changing the timetable of future Finance Acts. Why is this and what does this mean for my business?
From a tax point of view, the most exciting announcement of last week’s Autumn Statement was probably that this will be the last one. One of the reasons for this change is to allow Finance Bills to be introduced with sufficient time for Parliament to scrutinise any proposed tax changes and to reach Royal Assent during the following spring and before the start of the new tax year. There will be a transitional Budget in spring 2017 followed by a Finance Bill to get Royal Assent at the normal mid-July date. After a summer off, there will be another Budget in the autumn with the subsequent Finance Act 2018 to receive Royal Assent before the start of the 2018–19 tax year.
The legislative cycle will then begin with publication of draft clauses for Finance Bill 2019 in summer 2018, a Budget in the autumn and Royal Assent to Finance Act 2019 in the first quarter of 2019.
Concentrating all tax changes on a single event makes a lot of sense and should help give business some of the tax certainty it craves. Also, the new timetable allows longer for consulting on draft clauses which could make that a more meaningful process than it sometimes is at present.
It is important to note that this assumes business as usual on the political front in 2017 (a noteworthy assumption in itself given talk of elections). Going forward, the revised timetable will fit better with May elections and so make the two Budgets/two Finance Acts scenario less likely.
The Chancellor gave a clue to his intention to downgrade the Autumn Statement by studiously keeping tax changes in this one to a minimum. Philip Hammond confirmed that previously announced changes would happen pretty much as announced. So he will continue to follow the business tax roadmap with a corporation tax rate of 17% for financial year 2020, favourable regime for the oil and gas industries and changes to the business rate transitional relief cap which are apparently ‘complicated – but it’s good news’. Some interesting developments are:
- The intention to align employer and employee NIC thresholds from April 2017
- A personal allowance of £12,500 and higher rate threshold of £50,000 by 2020
- A review of non-cash payments by employers to their employees
- The introduction of 100% first year allowances for electric car charge-points
With just the publication of the draft clauses for the Finance Bill 2017 (scheduled for 5 December) to come, we are nearly at the end of a very busy tax year. Unless of course you have Scottish connections – the Scottish Government will be delivering its Budget on 15 December!
For more information and/or assistance, please contact our Tax Team who will be pleased to help you.