Philip Hammond presented his 2016 Autumn Statement on Wednesday 23rd November. His speech set out both tax and economic measures.
In this article, we summarise the key points arising from the Autumn Statement and focus on what the changes may mean for the agriculture sector.
In Summary (general):
- the government reaffirming the objectives to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament
- reduction of the Money Purchase Annual Allowance
- review of ways to build on research and development tax relief
- tax and National Insurance advantages of salary sacrifice schemes to be removed
- anti-avoidance measures for the VAT Flat Rate Scheme
- autumn Budgets commencing in autumn 2017.
In addition the Chancellor announced the following pay and welfare measures:
- National Living Wage to rise from £7.20 an hour to £7.50 from April 2017
- Universal Credit taper rate to be cut from 65% to 63% from April 2017.
In the March Budget the government announced various proposals, many of which have been subject to consultation with interested parties. Draft legislation relating to many of these areas will be published on 5 December and some of the details may change as a result.
In summary (agriculture specific)
- Autumn Statement set to be abolished and future budgets set to be in Autumn
- Insurance Premium Tax set to increase
- £1bn to improve broadband connectivity
- Rural Rate Relief set to increase to 100%
- Rural Rate Relief increase set to give small business in rural areas a tax break of up to £2,900 per year
- Making Tax Digital could have significant impact on rural businesses
Autumn Statement Agriculture Impact
Investment in broadband
Richard Marsh, Partner at Hawsons, commented: “There has been a mixed reaction to the Autumn Statement from Farming Groups. The Countryside Alliance said it should create real benefits for rural communities but the NFU said policy announcements fell short of helping to maximise the potential of farm businesses.”
“An important announcement was the proposed investment in broadband as it is estimated that only 42% of premises in rural areas have access to the proposed Universal Service Obligation speed of 10Mbs per second. The increase in the National Living Wage will also place an additional cost burden on farm businesses at a time when they may potentially face labour shortages under Brexit. Whilst the NFU has supported the living wage for all workers, it has expressed concern over the speed of implementation and lack of consultation.”
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