Chancellor Philip Hammond has delivered his first Autumn Budget under the new system he announced this time last year. The aim of the new system is for the Finance Bill, which is normally published after the annual Budget, to reach Royal Assent stage in the spring of each year, before the start of the following tax year. This change in the annual timetable is designed to help Parliament to scrutinise tax changes before the tax year where most take effect. The Finance Bill should be published on 1 December 2017. By the end of March 2018, the Office for Budget Responsibility (OBR) will publish an updated economic and fiscal forecast, which the Chancellor will respond to in a Spring Statement. The Spring Statement will also be a chance to publish consultations, including early-stage calls for evidence and consultations on long-term tax policy issues.

In the first part of his Budget, the Chancellor focused on Brexit and said that EU negotiations have now reached a critical phase. He said that the UK must be prepared for every possible outcome and announced that an additional £3bn will be available over the next two years for Brexit preparations. The money will make sure the government is ready on the first day of exit, and it includes funding to prepare the border, the future immigration system and new trade relationships.

On the subject of housing, there will be £15.3bn of new financial support for house building over the next five years, including £1.2bn for the government to buy land to build more homes, and £2.7bn for infrastructure that will support housing. Changes to the planning system are designed to encourage better use of land in towns and cities, and changes to the stamp duty land tax (SDLT) regime for first-time buyers are designed to assist with the challenges faced by many people trying to get on the housing ladder.

Over two million people are expected to benefit from an increase in the National Living Wage from April 2018, when the rate for those aged 25 and over will rise from £7.50 per hour to £7.83 per hour. For a full-time worker, this increase represents a pay increase of over £600 a year.

There are plans to introduce a railcard for those aged between 26 and 30 and this should be available from Spring 2018, enabling eligible passengers to receive a one third discount on ticket prices.

Households applying for Universal Credit can expect to see improvement in upfront support services. The Chancellor confirmed several changes in this area including:

  • access a month’s worth of support within five days, via an interest-free advance, from January 2018. This can be repaid over 12 months;
  • eligibility to apply from the date a claim is made, rather than after seven days as is currently the case;
  • Housing Benefit will continue to be paid for two weeks after a Universal Credit claim is made; and
  • low-income households in areas where private rents have been rising fastest will receive an extra £280 on average in Housing Benefit or Universal Credit.

There were several announcements concerning environmental and ‘green’ issues, including:

  • new rules enabling self-driving cars to be tested without a safety operator and an extra £100m towards helping people buy battery electric cars. The government will also make sure all new homes are built with the right cables for electric car charge points.
  • a £220m Clean Air Fund for local areas with the highest air pollution. Local authorities will be able to use this money to help people adapt as steps are taken to reduce air pollution. Possible ways the money could be spent include reducing the cost of public transport for those on low incomes or modernising buses with more energy efficient technology. The money will come from a temporary rise in company car tax and Vehicle Excise Duty on new diesel cars.
  • the government is to seek views on reducing single-use plastic waste through the tax system and charges. This includes items such as disposable coffee cups, toothpaste tubes and polystyrene takeaway boxes. This follows the introduction of the 5p carrier bag charge, which has reportedly reduced the use of plastic bags by 80% in the last two years.

Although the Chancellor shied away from confirming action on a number of employment-related tax issues in his Budget speech, in 2018 the Treasury will be consulting on how to tackle non-compliance with the IR35 intermediaries legislation in the private sector. It is likely that we will see future changes in this area.

This newsletter provides a summary of the key tax points from the 2017 Autumn Budget based on the documents released on 22 November 2017. We will keep you informed of any significant developments.


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