Ahead of the Autumn Statement, here are our predictions on what announcements we could see.
This year’s Autumn Statement will be held on 23 November and marks the first major fiscal event since the UK voted to leave the EU. Michelle Quest, Head of Tax at KPMG in the UK, said: “Commentators and the markets alike are waiting with bated breath for the Chancellor to spell out the direction of the country’s fiscal policy and put in place measures that will help the UK economy to cope with turbulence of Brexit. Since the EU referendum, expectations are for the UK economy to grow at a much slower pace in the coming years. To ensure economic growth remains positive, the Government needs to indicate a willingness to use fiscal policy to stimulate growth and act to reassure business and consolidate the UK’s position as an attractive place to invest.”
Ahead of the Autumn Statement, we’ve been compiling a list of predictions on what we might expect from the Chancellor this year. You can see the full list on our press release, but we’ve included some extracts below:
Robin Walduck, Tax Partner at KPMG in the UK, commented:
“Over the past year, a number of consultations on high-profile business issues have been released. These include the consultation on the deductibility of corporate interest expense (a response to the OECD’s BEPS Action 4), the consultation on corporation tax loss reform, and the proposed reform of the substantial shareholdings exemption. For companies, large and small, expectations are high that the Government’s responses on these proposals will be forthcoming at the Autumn Statement. For financial services in particular, clarity on any knock on effects on industry specific commercial issues will be actively sought."
Gary Harley, Head of Indirect Tax at KPMG UK, said:
“Over the last few years, we have not seen many major indirect tax changes and those we have seen have largely focused on perceived areas of lost revenue, such as the changes in this year’s Budget on overseas sellers and making online sellers joint and severally liable for VAT purposes. As such, we are not expecting a huge amount in this Autumn Statement from an indirect tax perspective given the rates that can be increased have already, and any major VAT changes are likely to be geared around Brexit.
“There have recently been rumours of a VAT decrease. Rumours invariably circulate on rates and with the VAT lock ruling out an increase, this is the only other alternative. Despite this, the Government would no doubt be careful to keep such a reduction under wraps so the rumours circulating a couple of weeks ago are probably just that.”
On changes to Employment Taxes, Colin Ben-Nathan, Tax Partner at KPMG in the UK, said:
“Further details are expected on the Government's intention to require public sector bodies to apply deduction of PAYE where IR35 applies. The Government has said this change is to apply from April 2017 which is fast approaching. However, we have real concerns about the practicalities of moving to deduction at source - there are a lot of unresolved issues and we just don't see how these can all be addressed by April next year. As a result, we urge the Government to allow more time for consultation and not to rush this through before all the key issues have been properly considered.
“The Government are also proposing to restrict the tax advantages of benefits-in-kind provided through salary sacrifice and flexible benefit arrangements with effect from April 2017. With many employers either asking or about to ask their employees what benefits they want to receive in 2017 we think it is important that the Government clarify the scope of these changes and their timing.”
Greg Limb, Head of Private Client at KPMG UK, highlighted:
“We would welcome a period of stability for personal taxes with limited changes announced in the Autumn Statement that impact individuals. However, we recognise that there is likely to be change regardless, particularly as the Government has indicated it is committed to rebalancing wealth. With this in mind, the publication of a personal tax roadmap giving clear direction of policy, especially on capital taxes would provide more certainty for transactions, investment decisions, succession plans and also cement the UK as a competitive jurisdiction on the international landscape.
“The Autumn Statement may bring further updates on the Government’s proposals to introduce inheritance tax on all UK residential property, regardless of the ownership structure or the residence of the owner. It is important to ensure that the proposed changes are workable on a practical level before their introduction from April 2017. If necessary, we would hope the Government consider delaying introduction until practical implementation issues have been resolved.”
To keep on top of all the announcements in the Autumn Statement, and to register for our webinars, please visit our website.
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