Chris Sanger, EY Head of Tax Policy, comments on the Chancellor’s first Autumn Budget:
“In delivering his first Autumn Budget, the Chancellor’s tax announcements had a distinct “Blue Peter” feel to them, having been prepared well in advance of the big day. The biggest tax change in the Budget scorecard was the Health and Social Care Levy, something released a month ahead of the appearance at the dispatch box.
“From a big business perspective, today’s announcements were also overshadowed by those of the Spring Budget, with the six percentage point rise in corporation tax, and the freezing of income tax thresholds. With these three changes, the Chancellor had indeed raised more in the last six months than many Chancellors have in any year. With many of the taxes yet to be felt by taxpayers, it is perhaps not surprising that he chose to stick with the pre-prepared announcements rather than add to the burden that is yet to be experienced.
“Changes to encourage investment, such as through a further temporary extension to the Annual investment Allowance, may sweeten the pill but the corporation tax rate increase is likely to dominate the pallet of many businesses for the next few years. The cut in the bank corporation tax surcharge from 8% (meaning a rate of 27%) to 3% (meaning a rate of 28% once the base rate of corporation tax increases) may be seen as a cut by some, but merely means that the penalty imposed on banks will be relatively less, even as the tax rate rises.
“However, the Chancellor has sought to change the tide for the future, with a consultation on the re-domiciliation of businesses. Coming at a time of change in the international tax regime, this effort to support companies seeking to relocate to the UK may prove to be a real boon for UK investment and help the Chancellor reinforce his message that Britain remains open for business.”