Philip Hammond's first Autumn Statement also happened to be
his last. But in a significant change from the fast-moving world of
politics, it's not because he's being replaced, standing
down, or switching ministerial portfolio.
Instead, among many of the UK Government's new initiatives,
Mr Hammond has made one of his first acts to abolish the Autumn
Statement and introduce an Autumn Budget, with the first to be in
Autumn 2017. The traditional Budget will be replaced with a Spring
Statement from April 2018, albeit with no major fiscal changes,
unless necessitated by major shifts in the economy.
Despite all that came before it, and it was in fact Mr
Hammond's final measure in his last-ever Autumn Statement, no
doubt it will be one of the most-talked-about and long-standing
moves from today.
But what else happened? Well, the good news is that there were
few surprise tax announcements – although there are many new
There was good news for low earners, families and motorists
across the country. The Chancellor announced the planned fuel duty
rise was to be scrapped again, saving the average driver about
£20 per year, while the Living Wage will be increased by 30p
per hour to £7.50 from April 2017. The Tax-Free Allowance
will also go up to £11,500 next year and the Chancellor
confirmed it will rise to £12,500 by the end of this
parliament. However, individuals and businesses won't
welcome another 2% increase in Insurance premium tax from June
2017, which would cost a two-car family about £21
There was equally good news for Scotland. The Scottish
Government can expect to see an extra £800 million per year
through the Barnett Formula, thanks to increased capital spending
in England. Work has also begun on agreeing a City Deal for
Stirling, the last of Scotland's cities to receive such a
package. Edinburgh and the Tay region's deals are also moving
On the less headline-friendly front, there were welcome
extensions to existing measures for businesses. Mr Hammond
confirmed the UK Government's continued support for the oil and
gas industry, good news for Aberdeen and the wider region in the
face of lower for longer oil prices. However, there were no new tax
Likewise, corporation tax will fall to 17%, as planned; making
the UK one of the most competitive places in the developed world to
do business. A £6.7 billion package to reduce business rates
was also mentioned, providing some much-needed relief for
organisations of all shapes and sizes.
Moreover, there were several measures that bode well for
Edinburgh and Scotland's burgeoning life sciences and tech
scenes. Among them, the Chancellor announced plans to increase
R&D investment by an extra £2 billion per year, along
with a £400 million venture capital fund through the British
Business Bank – all part of a £23 billion investment
fund for innovation and infrastructure.
Those who lost out? At first glance, there weren't too many.
Landlords and estate agents won't be too enthusiastic about the
proposed ban on letting fees, while those who currently sacrifice
part of their salary for other benefits (or receive an optional
cash allowance) will pay more tax from April 2017, with some
grand-fathering for those already receiving benefits. On the
latter, a few exceptions were mentioned, but the detail still needs
to be pored over.
All of the measures announced in the last-ever Autumn Statement
will require further study; but, on the face of it, there are a
number of reasons to be encouraged. We'll know more about
what's in store for Scotland on December 15 following the
Scottish Budget – which may outline how the extra £800
million the Scottish Government is going to receive will be spent,
as well as set out details of Scottish income tax rates and
In the meantime, follow us on @DeloitteScot for
further commentary and tweet us your responses to the
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The government has been working to incorporate the changes required as a result of the OECD's work on BEPS Action 5: Harmful Tax Practices, which requires implementation of a Nexus approach to the Patent Box regime.
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