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The new Chancellor of the Exchequer, Philip Hammond, today delivered his first, and last, Autumn statement.

This contained no ‘Rabbits out of a hat’ moments so far as tax is concerned, but there was one surprise announcement in that this will be the final Autumn statement, and the last Spring Budget will take place in 2017.  In subsequent years the Budget will be switched to the autumn, with a “Spring Statement” being introduced in its place.

The key tax issues arising from the Autumn Statement are as follows:

Personal Allowance and Higher Rate Tax Threshold

  • As expected, the personal income tax allowance will increase to £11,500 from 6 April 2017, with the higher rate tax threshold rising to £45,000.
  • The government has pledged to stick to its promise to increase these amounts to £12,500 and £50,000, respectively, by 2020.
  • From 2020, the personal allowance will then rise in line with the consumer price index (CPI), alongside the higher rate threshold, rather than National Minimum Wage (NMW).


 Termination Payments

  •  From 6 April 2018, employers’ National Insurance will become payable on termination payments of more than £30,000.


National Insurance Contributions

  •  The threshold for employer and employee National Insurance contributions will be aligned from 6 April 2017 so that employers and employees will pay NIC on weekly earnings received in excessive of £157.
  • For the self-employed, Class 2 NIC will be abolished from 6 April 2018, with all contributions being made through Class 3 and Class 4 NIC.


Employment Benefits

  • Following consultation, it is proposed that from April 2017, tax and National Insurance will be payable on salary sacrifice schemes, where an employee forgoes part of their salary in return for an equivalent amount of tax-free benefit being provided by their employer.  Exceptions to this will include pensions, childcare, cycle to work schemes and ultra-low emission cars.  Any arrangements in place before April 2017 will be protected for up to a year, with any arrangements in place for cars, accommodation and school fees will be protected for up to four years.
  • A reform to the process of valuing benefits in kind will be considered at Budget 2017 which would impact employer-provided living accommodation and a call for evidence on the valuation of all benefits in kind.
  • A call will be made at Budget 2017 for evidence to be produced for income tax relief on employees’ business expenses.
  • The tax advantages linked to shares awarded under Employee Shareholder Status (ESS) will be abolished for arrangements entered into on, or after, 1 December 2016.


Non-Domiciled Individuals

  •  No further announcements were made regarding the reform to the taxation of non-domiciled individuals on top of the previous proposals regarding deemed domicile rules, the sheltering of indirectly owned UK residential property from UK inheritance tax and Business Reinvestment Relief.



  •  The tax treatment of foreign pensions will be more closely aligned with the UK’s domestic pension tax regime by bringing foreign pensions and lump sums fully into tax for UK residents, to the same extent as domestic ones.
  • The government will also close specialist pension schemes for those employed abroad (“section 615” schemes) to new saving, extend from 5 to 10 years the taxing rights over recently emigrated non-UK residents’ foreign lump sum payments from funds that have had UK tax relief, align the tax treatment of funds transferred between registered pension schemes, and update the eligibility criteria for foreign schemes to qualify as overseas pensions schemes for tax purposes.


Corporation Tax

  • The main rate of corporation tax will be reduced to 17% by 2020.
  • A consultation will be announced to restrict the amount of profit that can be offset by carried-forward losses to 50% from April 2017.



  •  The government announced that, following the changes announced regarding disguised remuneration schemes by employers and employees, it will now extend the scope of these changes to similar schemes used by the self-employed.


Making Tax Digital

  • Making Tax Digital will see the biggest change in the tax system as we know it over the next few years, and more details will be announced on this in January.


If you would like to discuss how the Autumn Statement may affect you, please contact us.


All views and opinions expressed in the blogs are personal to the writer and may not necessarily be shared by everyone at TAP but our clients are always welcome to put forward alternative views and questions which we will endeavour to share via future blogs, where appropriate.