A Secure Statement
26 November 2015
The Autumn Statement didn't reveal any earth shattering tax reforms, which was hardly surprising for a policy statement with the buzzword of "security". It did, however, reiterate the government policy of commitment to small and medium sized businesses powering growth, and in particular in regions outside London.
From a fast growth company perspective, there were a couple of interesting points:
- The confirmation that the planned growth in apprenticeships would be funded by a 0.5% levy on businesses with large wage bills. It's promising that this plan is developing, as good quality and well administered apprenticeships may help to plug the skills gap in the fast growth tech sector.
- £1.3bn to be spent on digital transformation of tax administration - anything that helps to reduce the compliance burden for small and medium sized business is welcome. It will be interesting to see if this also facilitates a change in the way taxes are collected and the timing, e.g. the announcement of the acceleration of capital gains tax on disposals of residential property.
- Increased devolution allowing local government more powers to stimulate the economy combined with central investment in regional development such as the creation of new Enterprise Zones
- Continued investment in cybersecurity
- Extension of the doubling of Small Business Rates Relief for a further 12 months
- Investment in infrastructure - this mainly focuses on transport but many businesses would welcome improvements in digital infrastructure
A key part of the statement is the increase in tax revenues, from a healthy economy and further clampdown on tax avoidance. The Statement introduced a few tweaks to legislation on intangible assets and VCT rules to counter specific avoidances and the announcement of a consultation on company distributions, as well as a new General Anti-Abuse Penalty. However, this is far from the end of that story and this will be an interesting area to watch in the coming months as the full impact of the OECD recommendations on Base Erosion and Profit Shifting are digested and assimilated....