Autumn Statement 2016 Predictions
Mazars, the top-ten UK and international audit, tax accounting and advisory firm, offers South East businesses its take on the upcoming Autumn Statement.
The only certainty is uncertainty.
All eyes will be on Philip Hammond as he takes to the floor for his first Autumn Statement on 23 November 2016, following the hugely significant EU referendum result. Mr Hammond has already warned that Brexit will create economic turbulence and fiscal uncertainty. It is probably the case that the only certainty we will have for some time is that there will be uncertainty.
What we do already know is that Mr Hammond has abandoned the plans of his predecessor, George Osborne, to return the economy to surplus by 2020. He has also indicated his intention to ‘reset’ economic policy, so the Autumn Statement will present the first opportunity to see what this entails. A key factor is likely to be encouraging investment in the UK to stimulate the economy, which may take the form of a mix of tax incentives and investment in major infrastructure projects – in view of the continuing need to bring down the fiscal deficit this will no doubt require a balance between major announcements and deferred implementation.
The Prime Minister has also spoken about a government that works for everyone and not just the privileged few, but the government’s hands are somewhat tied on tax policy by the tax lock put in place by George Osborne, under which the government pledged not to increase income tax, national insurance or VAT over its current term. There is no such tax lock on corporation tax, and the trend set by Mr Osborne was to reduce the headline rate to attract inward investment. This is already set to fall to 17% in April 2020, but further reductions look less likely under the ‘new management’ (unlikely Mr Osborne’s intention to further reduce the rate to 15%). Nor is there any obvious limitation to the introduction of further “stealth taxes”. The 3% SDLT surcharge has proven to be a major money spinner, whilst the second Insurance Premium Tax increase in a year took effect on 1 October 2016 with the Apprenticeship levy coming into effect next April: the question is how creative could the Chancellor be?
Click here to read Mazar’s predictions on what will be in this vital announcement.