Welcome > Blog > Government > The Autumn Statement – what’s in it for business?
24th November, 2016
The short answer is ‘not a lot’, despite Mr Hammond stating “My priority as Chancellor is to ensure Britain remains the number one destination for business.”
Yesterday, Chancellor Philip Hammond brought us the last Autumn Statement for the foreseeable future as plans were announced for the spring Budget to be downgraded to the ‘Spring Statement’ and the main Budget to be delivered in the Autumn.
He outlined plans to increase spending on roads and transport links including the Oxford-Cambridge expressway and a major road scheme in the North, and extra funding to improve rail signaling. But although transportation for businesses may be improved, with the rise in the Insurance Premium Tax from 10% to 12%, additional costs are set to come out of the pockets vehicle owners.
In line with George Osborne’s previous budget commitment, Corporation Tax will fall to 17% by 2020. This is the lowest rate of all the G20 countries but not as low as Donald Trump’s promised to reduction of corporation tax in America to 15%. Speaking of “understandable public concern that the pitch is tilted in favour of multinational groups”, Mr Hammond said he would limit tax relief on corporate interest and the treatment of previous tax losses.
The most notable commitment is for a £23bn new national productivity investment fund to be spent over the next five years, increasing by £2bn a year by 2020/21. The fund is designed to bolster research and innovation.
Additionally, in the hope that takeovers of British tech start-ups by foreign buyers will be reduced, export finance is to be doubled and £400m will be injected into venture capital firms via the British Business Bank.
Small businesses in rural areas will receive tax reliefs up to £2,900
There will be a crackdown on employers offering ‘workplace salary sacrifice schemes’ (where workers receive untaxed benefits such as ultra-low emission cars instead of pay), whilst the National Living Wage will be increased from April 2017, and personal tax allowance increased to £11,500. The self-employed will see a clampdown on so-called ‘disguised earnings’.
“This was always going to be a difficult statement from the new Chancellor given the uncertainties posed by Brexit.” said Kevin Horne, Chairman, Cavendish Enterprise. “No doubt we can expect more in the next budget when sufficient time has elapsed for a considered approach to the needs of the country outside the EU.
“For small businesses there was not much to cheer but also not much to jeer either. For now it is “steady as she goes” but there is a massive opportunity for radical reform in leaving the EU and whilst it would involve short term sacrifice the long term prize could be great. Flat rate taxes, abolishing reliefs, simplifying regulation and really slashing bureaucracy will prepare us well for what the future holds – unfortunately few politicians have a long term approach caring more about re-election rather than strategy.”
Summarised by Davina Young , Marketing Manager, Cavendish Enterprise
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