Welcome to the 2016 Autumn Statement Newsletter from Accountants in Dartford

Chancellor pledges post-Brexit economy 'that works for everyone'

The new Chancellor of the Exchequer, Philip Hammond, acknowledged 'sharp challenges ahead' for the economy as he presented his first major fiscal statement, exactly five months after the UK's historic vote to leave the European Union.

The latest forecasts from the Office for Budget Responsibility confirmed an increase in borrowing, which is now forecast to reach £68.2bn this year. Economic growth is expected to slow over the next two years, initially rising marginally to 2.1% for 2016, but then reducing to 1.4% in 2017. Overall, the 'Brexit effect' is expected to impact on economic growth to the tune of 2.4%.

Having paid tribute to his predecessor, Mr Hammond then proceeded to sweep away George Osborne's fiscal targets, announcing a new draft Charter for Budget Responsibility. This replaces the aim of balancing the books by 2020 with a pledge to deliver a surplus 'as early as practicable' in the next Parliament, and an emphasis on allowing sufficient flexibility to build a resilient economy.

The Chancellor proposes to do this by prioritising investment in UK infrastructure and innovation, and announced the creation of a new £23bn National Productivity Investment Fund (NPIF) which will provide additional funding in four areas: transport, digital communications, research and development, and housing. 

The Statement included a number of other significant measures for businesses, including confirmation that corporation tax will be reduced to 17% by 2020 as planned, together with the implementation of the business rates reduction package. In other announcements, from April 2017 employee and employer national insurance thresholds will be aligned, and salary sacrifice schemes will be scaled back, with most schemes being subject to the same tax as cash income, although some exemptions will apply. 

Emphasising the government's stated commitment to low and middle income workers, the Chancellor announced that from April 2017 the Universal Credit taper rate will be reduced from 65p to 63p for every pound of net earnings. The National Living Wage and National Minimum Wage will also rise with effect from April 2017. The government's plans to raise the income tax personal allowance to £12,500 and the higher rate income tax threshold to £50,000 by 2020/21 were also confirmed, while a new NS&I Investment Bond will be launched for savers.

Other announcements included further measures to counter tax avoidance, an increase in insurance premium tax from 1 June 2017, and a freeze on fuel duty for the seventh consecutive year.

In a final flourish, and marking a major change to policy-making processes, the Chancellor announced that his first Autumn Statement would also be his last. 2017 will see the final Spring Budget, as from that point on the main Budget will be held in the Autumn.

What They Said

'We resolve today to confront [our] challenges head on. To prepare our country to seize the opportunities ahead. And in doing so, to build an economy that works for everyone… and where every corner of this United Kingdom is part of our national success.'
Chancellor Philip Hammond

'The figures speak for themselves. Growth down, wage growth down, business investment down, and their own deficit target failed.'
Shadow Chancellor John McDonnell

'Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses. Importantly, the new fiscal rules provide the government with welcome flexibility, while remaining prudent in uncertain times.'
Carolyn Fairbairn, Director General of the Confederation of British Industry

'The official figures have revealed a £220bn Brexit black hole - hundreds of billions taken out of our economy when we need it most. Given how bad the outlook is, it's no wonder the Chancellor doesn't want to have to do another Autumn Statement.'
Tim Farron, Leader of the Liberal Democrats

'The Chancellor's strong focus on the growth requirements of our cities, regions and nations will not go unnoticed in business communities across the UK.'
Adam Marshall, Director General of the British Chambers of Commerce

For more information see Accountants in Dartford

Accountants in Dartford

Regus

Victory Way

Dartford

DA2 6QD

01322 303162

December 2016 Newsletter from Accountants in Dartford

Chancellor pledges post-Brexit economy 'that works for everyone'

The new Chancellor of the Exchequer, Philip Hammond, acknowledged 'sharp challenges ahead' for the economy as he presented his first major fiscal statement, exactly five months after the UK's historic vote to leave the European Union.

The latest forecasts from the Office for Budget Responsibility confirmed an increase in borrowing, which is now forecast to reach £68.2bn this year. Economic growth is expected to slow over the next two years, initially rising marginally to 2.1% for 2016, but then reducing to 1.4% in 2017. Overall, the 'Brexit effect' is expected to impact on economic growth to the tune of 2.4%.

Having paid tribute to his predecessor, Mr Hammond then proceeded to sweep away George Osborne's fiscal targets, announcing a new draft Charter for Budget Responsibility. This replaces the aim of balancing the books by 2020 with a pledge to deliver a surplus 'as early as practicable' in the next Parliament, and an emphasis on allowing sufficient flexibility to build a resilient economy.

The Chancellor proposes to do this by prioritising investment in UK infrastructure and innovation, and announced the creation of a new £23bn National Productivity Investment Fund (NPIF) which will provide additional funding in four areas: transport, digital communications, research and development, and housing. 

The Statement included a number of other significant measures for businesses, including confirmation that corporation tax will be reduced to 17% by 2020 as planned, together with the implementation of the business rates reduction package. In other announcements, from April 2017 employee and employer national insurance thresholds will be aligned, and salary sacrifice schemes will be scaled back, with most schemes being subject to the same tax as cash income, although some exemptions will apply. 

Emphasising the government's stated commitment to low and middle income workers, the Chancellor announced that from April 2017 the Universal Credit taper rate will be reduced from 65p to 63p for every pound of net earnings. The National Living Wage and National Minimum Wage will also rise with effect from April 2017. The government's plans to raise the income tax personal allowance to £12,500 and the higher rate income tax threshold to £50,000 by 2020/21 were also confirmed, while a new NS&I Investment Bond will be launched for savers.

Other announcements included further measures to counter tax avoidance, an increase in insurance premium tax from 1 June 2017, and a freeze on fuel duty for the seventh consecutive year.

In a final flourish, and marking a major change to policy-making processes, the Chancellor announced that his first Autumn Statement would also be his last. 2017 will see the final Spring Budget, as from that point on the main Budget will be held in the Autumn.

What They Said

'We resolve today to confront [our] challenges head on. To prepare our country to seize the opportunities ahead. And in doing so, to build an economy that works for everyone… and where every corner of this United Kingdom is part of our national success.'
Chancellor Philip Hammond

'The figures speak for themselves. Growth down, wage growth down, business investment down, and their own deficit target failed.'
Shadow Chancellor John McDonnell

'Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses. Importantly, the new fiscal rules provide the government with welcome flexibility, while remaining prudent in uncertain times.'
Carolyn Fairbairn, Director General of the Confederation of British Industry

'The official figures have revealed a £220bn Brexit black hole - hundreds of billions taken out of our economy when we need it most. Given how bad the outlook is, it's no wonder the Chancellor doesn't want to have to do another Autumn Statement.'
Tim Farron, Leader of the Liberal Democrats

'The Chancellor's strong focus on the growth requirements of our cities, regions and nations will not go unnoticed in business communities across the UK.'
Adam Marshall, Director General of the British Chambers of Commerce

For more information see...

Accountants in Dartford

Regus

Victory Way

Dartford

DA2 6QD

01322 303162

November 2016 Newsletter from Accountants in Dartford

With the Autumn Statement fast approaching, Chancellor Philip Hammond has begun to outline his priorities for the UK economy. These include plans to increase spending on infrastructure, potential changes to the way in which tax policy is made in the UK, and a significant shift in economic policy, moving away from quantitative easing. Meanwhile, a report by the Public Accounts Committee has suggested that the Government's Better Regulation Executive has made 'limited progress' in reducing the red tape burden for businesses.

Following the Chancellor's speech on Wednesday 23 November, we will be providing coverage of the announcements on our website. We will also keep you up to date on the latest changes in our special Autumn Statement Newsletter.

Chancellor sets out his stall as the Autumn Statement approaches

Chancellor Philip Hammond is set to use the upcoming Autumn Statement to outline plans to increase infrastructure spending in an effort to boost the UK economy following the Brexit vote.

Renouncing the fiscal target set by his predecessor, George Osborne, of restoring public finances to a surplus by 2020, the new Chancellor stated that 'now is a good time to invest in genuinely productivity-enhancing infrastructure, and to take advantage of low borrowing costs and our ability to borrow'.

However, he insisted that his Autumn Statement plans would not constitute a 'fiscal splurge'.

The Chancellor's pledge to increase infrastructure spending will undoubtedly be welcomed by the British Chambers of Commerce (BCC), which in its Autumn Statement submission urged the Chancellor to 'boost business investment', improve infrastructure and demonstrate 'continued support for business'.

The business group has also called on the Chancellor to further reform the UK's business rates system, improve the implementation of the Apprenticeship Levy and invest in 'quick-start' infrastructure projects, such as housing and broadband.

It also recommends that the Government should not introduce new input taxes or other costs for businesses 'for the remainder of this Parliament', and that the Annual Investment Allowance be temporarily widened to allow for business premises improvements.

Adam Marshall, Director General of the BCC, commented: 'The Autumn Statement gives the Government a great chance to set the tone for its relationship with British businesses by pulling out all the stops to support investment, infrastructure improvements and business confidence.

'Plans to lower business costs and support investment would help firms take risks and seize opportunities in spite of the ongoing uncertainty surrounding the Brexit process.

'Westminster must do everything in its gift to improve the business environment - and firms will repay that backing with investment, hiring, training and export growth.'

'Limited progress has been made' in reducing cost of regulation

A report published by the Public Accounts Committee (PAC) suggests that the Government has made 'limited progress' in reducing the cost of regulation for UK businesses.

The Government had previously pledged to reduce the total cost of red tape by £10 billion between 2015 and 2020. 

However, in its report, the PAC reveals that less than £1 billion has been saved so far. It also suggests that the Government has included the compulsory 5p plastic bag charge as a 'saving' for retailers due to the additional revenue it generates.

Meanwhile, other significant costs, such as those generated by the National Living Wage, have been excluded from the target.

The report also claims that Government departments 'do not know how much it costs the business community to comply with existing regulations', and that these departments do not act to monitor and evaluate the effects of their regulatory decisions.

Following its findings, the PAC has put forward a number of recommendations to the Better Regulation Executive (BRE), the Government unit set up to cut the cost of red tape.

The PAC is urging the BRE to 'consider whether it is appropriate to include regulations imposed on business as contributing towards the target', and recommends that it sets out interim targets for savings to be achieved by the end of 2016.

Meg Hillier MP, Chair of the PAC, stated: 'A policy of reducing regulatory costs has the potential to deliver significant benefits but the Government has its work cut out if these are to be realized.'

Commenting on the report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: 'FSB members tell us regulation is the number one issue they want this Government to focus on. As we face the challenges and opportunities of Brexit, it is vital that we bolster business productivity and remove burdensome red tape.

'We urge the Government to act on this report so small businesses don't feel so overwhelmed by regulation.' 

ESSENTIAL TAX DATES FOR NOVEMBER

1 November
£100 penalty if 2016 paper Tax Return not yet filed. Additional penalties may apply for further delay (no penalties if online return filed by 31 January 2017).           

2 November
Submission date of P46 (Car) for quarter to 5 October.

QUOTE OF THE MONTH

'Next year's review of automatic enrolment must be used by the Government to provide a long-term plan for how workplace pensions will provide a decent retirement income for low and middle-earners.' 

Frances O'Grady, General Secretary of the Trades Union Congress, commenting on data published by the Office for National Statistics which suggests that workplace pension enrollment is at a 'record high'.

For more information see...

Accountants in Dartford

Regus

Victory Way

Dartford

DA2 6QD

01322 303162