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Autumn Statement 2016 - What Will Change for Your Business?

Chancellor Philip Hammond yesterday issued his first Autumn Statement to Parliament.

Changes announced to taxation and regulation likely to have direct effect on the UK’s SME community include:-

Corporation tax

Corporation tax will be lowered from 20% to 17% in 2020.

Employment taxes

There have been changes to tax on salary sacrifice, where an employee exchanges part of his or her cash salary for certain benefits.

Incorporation

A review of the tax rules for companies is likely and maybe higher taxation for those who choose to operate as a limited company.

Tax planning

The government, amongst other bodies, is looking to close in on aggressive tax avoidance schemes.

Insurance premium tax

There will be an increase in insurance premium tax, from 10% to 12%.

IR35 and working for the public sector

IR35 prohibits freelancers from forming a limited company so that they pay less tax on payments from their client, when their relationship in all other aspects is one of employer and employee.  From April 2017, it will be the decision of their agency or client to decide whether this legislation applies to them. There is also a suggestion of extending IR35 to the self-employed.

For advice on Autumn Statement contact the Business Team.

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