TaxCorporate TaxAutumn Statement unlikely to sound starting pistol for election

Autumn Statement unlikely to sound starting pistol for election

The Autumn Statement won't fire the starting pistol for the general election, but it might be a dry run, says Calum Fuller

Autumn Statement unlikely to sound starting pistol for election

IT’S THAT time of year again, where the government, in its boundless wisdom, attempts to redefine the seasons.

Its unerring commitment to pull December into the season of mists and mellow fruitfulness is a bizarre quirk which continues unencumbered by empirical evidence that it is very much a winter month.

Alas, that is the least of the profession’s concerns. There is the small matter of the content of the chancellor’s speech to worry about.

Well-trailed

In-keeping with previous Autumn Statements, a lot of the policies are well-trailed and, in many cases, have already been announced.

Among those measures are some of the anti-avoidance powers handed to HMRC over the course of 2014, including advanced payment of disputed tax, while the UK is committed to being an early adopter of the OECD’s measures against base erosion and profit-shifting (BEPS), so expect some reference to that work.

In a similar vein, a lot is likely to be made of the devolution of tax powers to Scotland given the recent referendum and the promises made during that campaign.

The key thing to bear in mind this time around, though, is that this is the final Autumn Statement of the parliament, and as such, is unlikely to sound the starting pistol for the general election with any great surprises or policy announcements. That will be reserved for the Budget in March.

It’s fair to expect a decent amount of grandstanding and declarations of successful policies greeted by gleeful Labour jeers.

And yet there is scope for a certain amount of the unexpected.

Business rates

In particular, there is a possibility for some movement over business rates, with eminent business people such as former Sainsbury’s CEO Justin King noting how prohibitive the levy can prove for small businesses and the high street. Given the government’s pro-business stance, a reduction would prove a popular and easy win.

Another business-orientated move available to the chancellor would be the facilitation of greater communication with medium-sized businesses, which has grown in momentum in recent months. Large companies such as those in the FTSE 100 have regular points of contact at HMRC over their tax affairs, and the provision of something similar for medium-sized entities would be widely welcomed.

There are, of course, always calls for the alignment and simplification of income tax and national insurance contributions, and while widely acknowledged as a sensible move, there’s no particular force that would see it brought in at this juncture.

Income tax tinkering

Similarly, while there may be a temptation to play with the income tax bands, the reality of coalition government will make it unlikely that any changes will be announced ahead of the general election barring a rise in the personal allowance, which in recent set pieces has risen circa £500 a time.

More active forces, however, are likely to see the current Patent Box regime stripped out and started again after a compromise with Germany and the wider EU saw the current regime watered down over state aid fears. While it may retain an option for UK businesses to grandfather intellectual property already in the existing regime, business is likely to be unimpressed with the scenario.

Calum Fuller is tax correspondent for Accountancy Age and Financial Director

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