The Autumn Statement 2016 – Tax Implications

·      Corporation tax will fall to 17% by 2020, becoming the lowest rate of corporation tax in the G20


·      Tax deductibility of corporate interest expense, the government will introduce rules that will limit the tax deductions that large groups can claim for their UK interest expenses from April 2017


·      Carbon Price Support will be capped out to 2020


·      Insurance premium tax to go up to 12% from 10% next June to raise revenue


·      ISA limit will increase from £15,240 to £20,000 in April 2017


·      Rural rate relief will double to 100%


·      Company Car tax; new, lower bands will be introduced to increase the incentive to purchase ULEVs (ultra low emission vehicles)

o   Percentage for cars emitting greater than 90g CO2/km will rise to 1% per point.


·      Personal Allowance will be raised to £12,500 and higher rate threshold to £50,000 by 2020         

o   Next year, Personal Allowance will reach £11,500 and higher rate threshold to £45,000


·      Plans to scrap employee tax breaks


·      Employee Shareholder Status (ESS) will be abolished for arrangements entered into, on or after 1 December 2016.


·      Salary sacrifice will be removed from April 2017, expect for arrangements relating to pensions (including advice), childcare, Cycle to Work and ultra-low emission cars.


o   This means employees that are swapping salaries for benefits will pay the same tax as the vast majority of individuals who by these benefits out of their post-income salary

o   Likely that the incentive for businesses to offer work perks to plummet.


·      Requirement to register offshore structures will be introduced


·      VAT Flat Rate Scheme will be introduced as a 16.5% rate from April 2017 for businesses with limited costs, such as many labour-only businesses.


·      From April 2017 non-domiciled individuals will be deemed as UK-domiciled for tax purposes if they have been a UK resident for the 15 of the past 20 years

Bambridge Accountants London