Malcolm Emery, partner at Thrings and dual-qualified chartered tax adviser and solicitor gives his comments on today’s Autumn Statement and Spending Review.
“In what was effectively his fourth budget speech in less than 12 months, today’s Autumn Statement and Spending Review provided the Chancellor with the opportunity to announce a series of vote-winning giveaways to businesses and individuals.
“Mr Osborne still appears to be in austerity mode, and with a large black hole to fill it is arguably with good reason. The economy is predicted to grow at approximately 2.3% each year over the next five years, with debt levels as measured against national income expected to fall from 82.5% to 71.3% by 2020-21 and the cost of borrowing due to fall to £4.6bn in 2018-19. He is also sticking with his forecast that by 2019-20 there will be a surplus of just over £10bn in the Government coffers, a far cry from his first Spending Review which followed the assertion from his predecessor that “there’s no money left”.
“The rise in the basic state pension, protection of police budgets and the increase in financial support for education will have been welcomed by many people in the UK. However it is the Government’s decision to scrap proposed changes to tax credits that will inevitably attract the headlines, with some of the required £4.4bn being met by an increase in stamp duty land tax payable on buy-to-let properties.
“Many businesses will welcome the abolition of uniform business rates, the setting aside of £12bn for a Local Growth Fund and the creation of 26 new or extended Enterprise Zones. Meanwhile the introduction of an apprenticeship levy – set at 0.5% of the employer’s wage bill – will aim to deliver three million apprenticeship starts by 2020, with each employer receiving a £15,000 allowance to offset against their levy payment.
“Little was offered by the Chancellor on further tax cuts, although this is perhaps not surprising as many are still working through the reforms he proposed in his summer Budget to non-domiciled individuals living in the UK and the taxation of dividend income. Both reforms will impact on the economy, particularly for those families who use companies for business and wealth preservation purposes.
“Mr Osborne also talked about the digital age and its ability to facilitate costs savings within HMRC by creating individual accounts for each and every taxpayer. Earmarking an additional £800m to tackle tax evasion highlights the Government’s commitment in this area, with the new measures forming part of his plans to ensure the UK has the ‘most digitally advanced’ tax system.”
Pictured above: Malcolm Emery, Partner at Thrings