Pedalling through “choppy waters”: What to expect from Phillip Hammond’s first Autumn Statement
22 November 2016
What a year it’s been. That statement refers to a lot of things in 2016: we had the Olympics in Rio, the Euros in France, Presidential elections in the US and of course, we had Brexit in the UK.
And now, on the 23rd of November the new Chancellor will make his first major economic announcement since the UK’s decision to leave the EU in June. The number one question on everyone’s mind is “what areas can we expect announcements on given that we don’t know the UK Government’s strategy for Brexit?”
I’ve been working with my colleagues at PwC to take a stab at predicting what areas we think Phillip Hammond will make announcements on. As a keen cyclist, let me break down our predictions in terms that you other cyclists will understand well. Based on what we expect to see, let’s break some of our key predictions into some stages of the Tour de France:
Area – Personal Tax. Stage – Mountain
If Hammond’s objective here is to make a memorable change, then he’s got a mountain to climb to do so. We reckon that the new Chancellor is unlikely to continue the previous Chancellor’s policy of raising the tax-free allowance.
One of my colleagues Iain McCluskey, partner at PwC has highlighted the way that the Chancellor could really leave his mark and put himself ahead of the pack: by raising the primary threshold for National Insurance contributions. You can read more Iain’s thoughts here
Area – Pensions. Stage – Hilly
The introduction of Lifetime ISAs in March’s Budget was seen as an avoidance of wide-scale pension reform and instead a covert move to reform pensions through the back door.
Raj Mody, global head of Pensions at PwC, has made the case to suggest that the Chancellor could make another covert move: to simplify the Annual Allowance which would signal moving towards a more modernized pensions tax system.
Area – Non-domicile tax. Stage – Hilly
Non-dom tax is addressed in the Government’s measures to tackle anti-avoidance. Although these are due to be implemented in a few months, details of measures around non-dom tax still haven’t been released.
Alex Henderson, tax partner at PwC has suggested that for the Chancellor to achieve his key objective of showing the world that ‘Britain is open for business’, he should consider simplifying the non-dom tax regulations which have become increasingly complex. You can read more on Alex’s predictions by clicking here
And, you can find out more about my predictions for the Autumn Statement, and what changes could mean for employees and employers by clicking here to watch my predictions video.
We’re also hosting a live interactive webcast at 5pm on the 23rd, where a panel of PwC’s experts will provide our initial reactions and analysis of the announcement. You can sign up for the webcast here
Unlike the Tour de France, you’ll see that there are no stages of the Autumn Statement that are flat, mainly due to the uncertainty caused by Brexit.
And it could be said that with the Prime Minister announcing the timeframe for triggering Article 50, EU negotiations looming and unforeseen Supreme Court intervention to ensure parliamentary involvement, that the Chancellor’s first Autumn Statement is just one massive time trial.