Autumn Statement 2016
This week we saw Phillip Hammond, The Chancellor of the Exchequer, give his first Autumn Statement to Parliament. After the result of the referendum in June, this autumn’s statement has been long anticipated as it will set the precedent for how Britain will position itself outside of the European Union. We’ve taken a snapshot of the proposed changes that will affect small business, freelancers and contractors.
Autumn Statement 2016 Highlights
The biggest shake up for the contracting industry is the now confirmed reforms to IR35 in the public sector, which is now under the name of Off-Payroll Working. There will be increased responsibilities for potential employers and/or agencies supplying to the public sector on tax due from individuals working for them through personal service companies and similar arrangements.
In April 2017, the tax-free personal allowance will be increased from £11,000 to £11,500 for basic rate (20%) tax payers and the threshold for higher rate (40%) tax payers will be increased from £43,001 to £45,000.
The National Living Wage is also due to rise from £7.20 to £7.50 per hour.
The National Insurance threshold will be increased to £157 for both employees and employers, this is currently £155 per week for employees and £156 for employers.
The tax and national insurance advantages of “salary sacrifice” schemes to be withdrawn, apart from arrangements involving pensions, childcare, cycle to work and low-emission cars.
From the 1st June 2017, Insurance Premium Tax will rise from 10% to 12%.
Changes are to be made to the VAT Flat Rate Scheme for businesses spending less than 2% of their turnover or less than £1,000 per year on goods. This excludes capital goods, food, vehicles and fuel.
As planned, corporation tax is due to fall from 20% to 17% by 2020.
For the seventh year in a row, fuel duty rise has been cancelled. This will save the average car driver £130 and van driver £350 a year.
As always, we’ll be making sure that you comply with any new or updated legislation when we have more details after 5th December.
We’ll also help you make the most of investment opportunities, given the changes to ISA initiatives and Pension Contributions.
If you have any questions about how the announcements in the Autumn Statement may affect you, please don’t hesitate to get in touch.
For a full recap of the Autumn Statement please read our detailed guide.
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