Our Tax Partner, Alastair Wilson, shares his reaction following the Autumn Statement 2016…
As part of the build up to the Autumn Statement, BBC Breakfast carried an interview by Steph McGovern this morning where the interviewee said they were expecting from Philip Hammond in terms of policies “less of a rabbit from a hat, more a couple of gerbils”. Which summarises what happened perfectly!
Whilst there was very little by way of surprise, what was announced was generally “business friendly”, albeit without committing to anything which would represent a game changing event.
Announcements such as the continuation of the programmed reductions in Corporation Tax to 17% and a continuing freeze on Fuel Duty rates will certainly assist our region’s employees and employers, as will an increase in the National Living Wage and National Minimum Wage from April 2017 and committing to raise the Personal Allowance to £12,500 and the Higher Rate Threshold to £50,000 by 2020-21.
I was also pleased to hear about the new £23 billion National Productivity Investment Fund, which will ensure the UK’s economy is fit for the future, as well as the funding for SME’s via both the British Business Bank and the Northern Powerhouse Investment Fund.
Investments in both Housing Infrastructure and also Future Transport technology, to help ensure we have affordable places to live and also the means to get home!
In terms of North East specific proposals, these were limited but there was an update on the Northern Powerhouse strategy document which includes measures which will assist the North East such as a potential investment of £15m in the National Institute for Smart Data Innovation in Newcastle, £6m for Tech North to accelerate the northern digital economy and £15m for Northern Powerhouse trade missions to encourage overseas trade.
A third round of Growth Deals with £556m of support to Local Enterprise Partnerships in the North will certainly help to boost our local economies.
One final, and mainly unexpected, change was a switch from an annual Autumn Statement and Spring Budget to using the future Autumn Statements as the “budget” instead. This is welcome as it reduces the number of times annually that major policy changes will occur by 50%!
Overall, the Autumn Statement didn’t include many major surprises, but equally didn’t include many new headaches for North East businesses and overall the lack of change and a period of stability should be welcomed.
For further advice, please contact Alastair Wilson.