shaw gibbs - accountants and business advisers
accountants & business advisers

Have a question? Like to know more? - Contact us or Call +44-1865 292200 or +44-20 7436 4773, Mon-Fri 8:15am - 5:15pm

*Initial meeting is free of charge

To latest news
The 2016 Autumn Statement: a round-up of key measures - news article image

The 2016 Autumn Statement: a round-up of key measures

28 Feb 2017

2 minute read

In his first major financial statement, the new Chancellor Philip Hammond unveiled a number of measures that may affect you and your business.

Business measures

Corporation tax

The Chancellor reconfirmed that the corporation tax rate, currently 20%, will be reduced to 19% for the financial years beginning 1 April 2017 onwards, with a further reduction to 17% coming into effect for the financial year beginning 1 April 2020.

National insurance contributions (NICs)

The national insurance secondary (employer) threshold and the national insurance primary (employee) threshold will be aligned from April 2017, meaning that both employees and employers will start paying national insurance on weekly earnings above £157.

Salary sacrifice

From April 2017, the tax and employer national insurance advantages of many salary sacrifice schemes will be removed. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.

VAT flat rate scheme

A new 16.5% rate of VAT will apply from 1 April 2017 for businesses with limited costs, such as labour-only businesses. Anti-forestalling provisions have been introduced to prevent any business defined as a limited cost trader from continuing to use a lower flat rate beyond 1 April 2017.

Employee shareholder status (ESS)

The tax advantages linked to shares awarded under ESS have been abolished for arrangements entered into on or after 1 December 2016, and the status itself will be closed to new arrangements at the next legislative opportunity.

Personal measures

Income tax

The personal allowance will rise to £11,500 from 6 April 2017, while the higher rate threshold will increase to £45,000, as previously planned. The government has committed to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament.

ISA limits

From 6 April 2017, the annual subscription limit for Junior ISAs and Child Trust Funds will be uprated in line with CPI to £4,128. As previously announced, the ISA limit will rise from £15,240 to £20,000 from 6 April 2017.

National Living Wage and National Minimum Wage

The rate of the National Living Wage will increase to £7.50 an hour from April 2017. The government has also accepted all of the recommendations of the Low Pay Commission for the National Minimum Wage.

Money Purchase Annual Allowance (MPAA)

April 2015 saw the introduction of new pension flexibilities. Once an individual has accessed their pension savings flexibly, if they wish to make any further contributions to a defined contribution pension, tax-relieved contributions are restricted to a special MPAA. Subject to consultation on the detail, the MPAA will be reduced from £10,000 to £4,000 from April 2017.

Insurance premium tax (IPT)

The standard rate of IPT will rise again from 1 June 2017, from 10% to 12%, marking a doubling of the tax within a period of just over 18 months.

The Chancellor also revealed that his first Autumn Statement would be his last, as following the Spring 2017 Budget and Finance Bill, future Budgets will be delivered in the Autumn.

The 2016 Autumn Statement: a round-up of key measures - news article image

For more info contact us:

01865 292 200

020 7436 4773

© 2022 Shaw Gibbs Ltd

Your registration