Barry Murphy, Tax partner, gives his views on the Chancellor’s speech today which felt more like a Budget than an Autumn Statement.
The Chancellor focused on how he will boost UK business and our competitiveness in an international environment. To pay for this he’s targeting those he says can afford it most.
So, the Autumn Statement, or I think actually with so many changes announced today it was more like a Budget. Overall theme is very much that Chancellor Osborne – whether we like it or not – is saying, Plan A is the plan and that’s what we're sticking to.
So today, what we got was a balance of further measures to boost business and business competitiveness, paid for by those he says can afford it most, the rich. And obviously continued restraint on the spending side – again we heard more on that today.
So let’s look at how that unfolded. On the business side, there was certainly some help on business rates, capital allowances – both for big companies and small and medium sized enterprises – and also a further reduction in the corporate tax rate from 2014. I think all good news.
A focus on science, engineering, advanced manufacturing and further pump priming was announced in those areas today. There was also, I think a very important announcement in terms of the wider debate that is there at the moment on corporate taxation and big companies. What he has said today, broadly, is that needs to be seen in a proper context of the need for an internationally joined-up response and proper policing of the system. The focus was very much on international competitiveness of UK business and the UK tax system, a very clear signal for all there.
So, if we start to move to the personal side of the equation, some of the tax rises. Obviously there was the expected announcement on anti-abuse rules and that will apply right across the taxpayer base. There was also reference to the money that he is expecting to come back from the Swiss disclosure facility, there was some real rate tax rises given how thresholds are going to move. We got some tax rises coming in through restrictions.
More restrictions on pension allowances and, actually a bit of a double whammy there, so real rate tax rises, certainly at the top end driven by how thresholds will move over the next few years. But I suppose importantly he also reeled back from any knee-jerk responses on things like mansion tax, even though we do have some changes coming through in the system on foreign owned property etc.
But no big new headline grabbing measures and he was quite distinct about that. Again, looking for a little bit of certainty and stability in the system. Quite a lot around in the detail, so again, very much Plan A. A little bit of re-balancing between business priming, taxing those he says can afford it most, so, whether we like it or not that’s where we're going to be for the foreseeable future. No big white rabbits out of the hat today, but plenty of detail to pay attention to.
Please join us here, next week as well, when we'll have the Finance Bill 2013 released and more detail on some of the measures.