Autumn Statement - Jon Richardson's reaction transcript

Transcript

The Chancellor talked about the strongest in society shouldering the burden. Businesses are clearly on that list. Already record levels of tax as a percentage of GDP have gone up by a further 1%.

Many of the measures discussed were trailed ahead of the statement. But the numbers are eye watering nonetheless. On its own, the freezing of the employers’ NIC threshold is set to raise a further £5 billion a year. And then there are increased windfall taxes on energy producers, including low carbon ones.

The big question is what impact this will have on investment and competitiveness? Growth was a major theme within the statement. But tax relief on investment is being scaled back. The super deduction allowance expires in April, with nothing being put in its place. This leaves the UK less competitive on capital allowances compared to other major economies.

We’re also seeing a shift in R&D tax credits from SMEs to larger businesses. This in part reflects cases of abuse in the SME arena, but overall, there will be a net reduction in relief.

The extension of the business rates relief for small retail, leisure and hospitality firms and the freezing of the multiplier are clearly welcome, and one of the few unexpected positive measures within the statement.

When looking at competitiveness, it’s important to also think about the complexity of the tax system. The simplification talked about by the previous Chancellor has been put on hold. Indeed, compliance demands will increase as more income and gains are brought into the tax net. We’re also set to see the introduction of OECD Pillar 2. Although the minimum tax level is 15%, the Treasury still expects to raise a further £2 billion as a result of the introduction. And it will come with a mountain of additional compliance.

There were few surprises from the Chancellor. But with tax rates so high, relief falling and complexity rising, it’s hard not to conclude that the UK’s tax competitiveness has deteriorated.