Autumn Statement: Hammond's "missed opportunity", say advisers

THE CHANCELLOR has “missed an opportunity” to restore business confidence and encourage UK investment, said Mazars.

Since the announcement of chancellor Philip Hammond’s first (and last) Autumn Statement on 23 November, questions have been raised about the narrow and targeted nature of the government’s investment plans, and increases in employment costs through National Insurance ‘equalisation’.

Tim Davies, partner and head of tax, Mazars UK, said: “The UK may still be open for business and is still highly attractive to inbound investment due to low corporation tax rates and ‘holding company’ incentives. However, more could have been done to ensure the UK remained competitive in its aim to be the number one destination for business.”

While the UK will have the lowest corporation tax rate (17%) of the G20, potential increases in employment costs (e.g. through national insurance changes, increases in NMW or changes to salary sacrifice schemes) will be “unwelcome”, Davies added.

Mazars also noted there were no new incentives for general capital expenditure.

Tax avoidance plans welcomed

Although business confidence and investment is “low”, some accountants are satisfied with the plans to increase penalties for tax avoidance and the lowering of corporation tax.

James Abbott, founder of Abbott Moore and president of the UK200Group, said: “Although there weren’t a huge number of changes to tax, I was pleased to see the government’s commitment to lowering corporation tax to 17% as this will directly affect a lot of my business clients.”

Francis Whitbread, tax partner at Edmund Carr, said: “The announcement of a crackdown on the promoters of tax avoidance schemes is welcomed by those of us who have been trying for years to make sure our clients do not get involved.”