Chancellor’s Autumn Statement

01 November 2016

The Chancellor has given his first (and last) Autumn Statement to the House of Commons. There were no announcements to accompany the Autumn Statement which affect EU claims. For a summary of the statement otherwise please read on.

It will be his last Autumn Statement because he has announced that with effect from autumn 2017, the Budget/Finance Bill cycle will move to the autumn from the spring. There will continue to be a spring statement each year as the Government is obliged to respond to the Office of Budget Responsibility’s spring forecast. However the Chancellor has said that he intends that, normally, all proposed tax changes will be announced in the Autumn Budget. Draft clauses will normally be published during the summer. This timetable should allow for full discussion of any proposals before the commencement of the tax year in April. On balance this new timetable should be an improvement on what happens at present. However much will probably depend on the publication of draft clauses in the summer rather than after announcement as part of a Budget speech.

The Chancellor announced the usual number of technical fiscal changes but nothing that seems overly dramatic. On the business tax front, the Chancellor has recommitted to the existing business tax roadmap which should lead to a reduction in the CT rate to 17% by 2020. However the ‘roadmap’ also contains plans regarding the implementation of BEPS and the tax transparency agenda. Apart from this the Chancellor announced that the Government is proceeding with plans to legislate to deal with the deductibility of corporate interest charges, the reform of loss relief and the reform of the substantial shareholding exemption. Each of these changes have been the subject of consultation already.

Interestingly the Chancellor announced that the Government is considering bringing the UK income of non-resident companies into the CT regime. As well as putting all companies onto the same footing in terms of the tax rules that apply, the suggestion would also probably serve to mitigate any rate discrimination as the rate of CT decreases. On the personal tax side the Chancellor has said that the Government will examine the taxation of different forms of remuneration. After consultation, it is intended that (with specific exceptions) the tax and NICs advantages of salary sacrifice arrangements will removed. At the same time the Government intends to consider the question of how benefits in kind are valued for tax purposes.

A low key but potentially significant announcement was that NICs are going to be removed from the ambit of the Limitation Act from April 2018 and be aligned with the time limits and recovery processes currently applicable to other taxes. Whilst this change has the obvious attractions of consistency and simplicity it will mean that HMRC will be able to go back up to 20 years in the enforcement of unpaid NICs. It will be interesting to see the commencement rules for the legislation implementing this proposal.

The blitz on avoidance (and evasion) continues. The changes in respect of disguised remuneration schemes used by employers and employees announced at Budget 2016 will now be extended to counter the use of such arrangements by the self-employed. The Government will legislate the much debated proposals for a new penalty for those who enable another to use a tax avoidance arrangement that is subsequently defeated by HMRC. Much of the debate has involved professional advisers who will be the asserted ‘enablers’ but as part of the proposal, those who use the tax arrangements will cease to be able to rely on the fact of having taken much professional advice as a defence of ‘reasonable care’ in relation to a penalty exposure. The ‘requirement to correct’ which has been the subject of consultation will be enacted. Finally the Government has announced a new requirement for intermediaries arranging complex structures for clients holding money offshore to notify HMRC of the structure and the related client lists. It proposes to consult on this proposal.

This article appears in the JHA November 2016 Tax Newsletter, which also features:


  1. Court of Appeal Judgment in The Test Claimants in the Franked Investment Income Group Litigation v HMRC [2016] EWCA Civ 1180 by Cristiana Bulbuc
  2. C-68/15 X – Attorney General’s Opinion on Belgian “fairness tax” by Christopher Kientzler
  3. The Council of the European Union agrees Criteria for the Screening of Third-Country Jurisdictions as Non-Cooperative Jurisdictions by Cristiana Bulbuc
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