Opportunity missed to cut key taxes
The Chancellor has delivered an Autumn Statement that provides some relief for low earners, but falls short on indicating an ‘open for business’ Britain, says ACCA (the Association of Certified Chartered Accountants).
According to its tax experts, changes to the tax-free threshold and Universal Credit taper will bring some—albeit long-term—relief to “just-about-managing” (JAM) households, but the Chancellor missed an important opportunity to cut corporation tax further.
Chas Roy-Chowdhury, head of tax at ACCA, said: “This Autumn Statement would have been an ideal time for the Chancellor to consider a further corporation tax cut to 15%. A further cut would have given business a sense of security in a changing world, and positioned Britain as ahead of the curve and truly ‘open for business.”
Laura Mair, EY Partner, Scotland said: “Most businesses want the Government to shift its focus onto reducing the employment tax burden. However, all we saw today was a slight increase to employers National Insurance Contributions – so no help there in offsetting the costs of the apprenticeship levy.”
Toby Ryland, corporate tax partner at the chartered accountants HW Fisher & Co said UK-based businesses are to be rewarded at the expense of foreign firms.
“Buried in the detail of the Treasury press release is a provision that will pull all companies with UK taxable income into Britain’s corporation tax regime.
“This is likely to include tens of thousands of offshore companies that currently pay minimal UK tax, and could see many hit with a substantial capital gains tax bill.
“With UK corporation tax set to fall to the lowest level of any major economy in the world, by tightening the rules for foreign firms seeking to use Britain as a tax haven the Chancellor has given multinationals a stark choice – come to the UK for its low corporation tax, but expect to pay the tax on all your UK income.
“By contrast the tax increases for exclusively UK-based firms were more modest, though smaller firms will feel more than most the combined impact of an additional national insurance hit for employers and the increase in the national living wage.”