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Autumn Budget 2017: Employers’ overview

Autumn Budget 2017: Employers’ overview

With the Ashes getting started in Australia, the Chancellor played with a straight bat but there were a number of important updates on consultations and future plans.

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Autumn Budget 2017: Employers’ overview - illustration group of people

The first Budget of the new Parliament took place this afternoon, and as the Ashes gets underway in Brisbane this evening, to coin a phrase, we think the Chancellor has played a straight bat from an Employment Tax perspective. Nevertheless, there were a number of important updates, following on from the latest round of consultations, together with the announcement of plans for potential changes in 2018 and beyond.

As expected, the Government announced a consultation on the extension of the recent IR35 reforms from the public sector, into the private sector. On balance this appears to be a measured approach from the Chancellor, though we will know more once the consultation paper has been published.

The Government has announced that it will publish a discussion paper as part of its response to Matthew Taylor’s review of employment practices in the modern economy, exploring the case and options for longer-term reform to make the employment status tests for both employment rights and tax clearer. It is to be hoped that ultimately measures will indeed be introduced which include a clear and aligned definition of ‘employment’ for tax and employment rights purposes;

The Government has now announced its plans to make several changes to the taxation of employee expenses. However, it has been noted that there was little evidence to support fundamental reform to the tax relief for employee expenses, and consequently the Government has no further plans to do so. Instead, however, the Budget specifically focussed on benchmark and overseas scale rates, as well as self-funded work-related training and an exemption for employer-provided electricity for privately-owned electric vehicles.

Following consultation on the Disguised Remuneration anti-avoidance rules, we also saw an update at the Budget on the continuing work in this area, including measures covering the abuse of the NIC Employment Allowance and the extension of time limits for offshore cases of non-compliance.

 

Other relevant measures:

Employment Status and the Taylor Review

The Government will publish a discussion paper as part of its response to the Taylor Review, exploring options for reform to employment status tests.

Off-payroll workers in the private sector

The Government has announced its intention to consult on the extension to the private sector of the IR35 reforms, introduced in the public sector earlier this year. 

 

For more details, please contact:

Colin Ben-Nathan

T : +44 (0)20 7311 3363

E : colin.ben-nathan@kpmg.co.uk

Mike Lavan

T : +44 (0)20 7311 1437

E : Mike.lavan@kpmg.co.uk

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