On Wednesday 23 November, Chancellor Philip Hammond will deliver the 2016 Autumn Statement, setting out the fiscal agenda for next year.
Some of the topics can be guessed from HM Revenue & Customs’ extensive list or recent consultations. These may include:
- The latest plans for the ‘Making Tax Digital’ project to introduce compulsory electronic record-keeping and quarterly reporting for small businesses, self-employed persons and landlords;
- Restrictions on the corporation tax deduction for interest paid, and changes to the carry forward and set-off rules for losses;
- Amended taxation of termination payments, with all payments in lieu of notice and some damages payments taxable as earnings;
- Further restrictions on salary sacrifice arrangements and disguised employment;
- A potential reform of the substantial shareholding exemption;
- Important changes to the inheritance tax hallmarks used in the disclosure of tax avoidance schemes (DOTAS) regime; and
- Penalties for enablers and users of defeated tax avoidance arrangements.
Other tax-related policies may be indicated in the publication of draft clauses of the Finance Bill 2017 on 5 December. These could include:
- The final form of the deemed-domicile rules for resident non-domiciles;
- Inheritance tax changes to bring into charge UK residential properties held by individuals through offshore structures;
- Legislation creating a new obligation for taxpayers to correct their tax returns for offshore income; and
- Changes to the double taxation treaty passport scheme, perhaps extending the scheme to partnerships.
Many commentators have suggested that the chancellor may have second thoughts about some already-announced policies, such as the restriction of relief on landlords’ borrowing costs.
There has also been extensive lobbying for a reduction in stamp duty land tax in light of the recent slowdown in the residential property market.
The time frame for implementing the ‘Making Tax Digital’ project has come under sustained fire from critics. It would not be surprising if the Chancellor at least raised the possibility of implementation over several years rather than months.