Comment on the Autumn Statement 2016 by Nick Paterno, Managing Partner at McBrides Chartered Accountants in Kent
“It was interesting to see the new Chancellor Philip Hammond’s confident and humorous style at the dispatch box – business may welcome his assuredness following the uncertainty since the Brexit vote in June.
“Sticking to the business tax road map set out by his predecessor he announced that corporation tax will fall to 17% by 2020, something that all corporates will be relieved about.
“The £1.1bn investment fund in English local transport and additional investment in research and development (rising to an extra £2bn per year by 2020/2021) will also be welcomed by many.
“However, it wasn’t all good news for business. The 4.17% increase in the National Living Wage from April 2017 (rising from £7.20 to £7.50) will affect businesses employing low paid employees; something that will impact the agricultural sector for example in Kent as well as cleaning firms, the retail sector and hospitality based businesses. And a lowering of the Employers’ National Insurance threshold, whilst apparently having a small impact according to Hammond, will hurt also. Some of the larger of these employers still face the introduction of the new 0.5% apprenticeship levy which comes in to effect in 2017.
“It’s hard to see employees or employers welcoming the stop on tax savings from some salary sacrifice and benefits, although ultra low emission cars, pensions, childcare and cycling apparently will be unaffected.”
“Firms will welcome the continued fuel duty freeze but the doubling in insurance premium tax from 6% in October 2015 to 12% effective from June 2017 next year will have added significant cost for many businesses especially those with high insurance premiums such as hauliers and construction companies, as well as individuals’ home and car insurance policies.
“The Chancellor obviously had to deal with the brakes put on the economy by Brexit which is forecast by the OBR to lose us 2.4% of growth through to 2019. In the end he ‘tinkered’ in a number of places only, taking with one hand, to redistribute with the other. The main sectors concerned at the new measures though will be those industries employing low paid workers who may feel they have been hit once again.”