'In 2016, HMRC will continue with its plans to become a smaller, but more highly skilled department, based in 13 regional centres, in order to give customers the modern services they expect, at a lower cost to the taxpayer', writes HMRC chief executive Dame Lin Homer for Tax Journal in January.
Later that month, Homer announces that she will be leaving the department in April. ‘After ten years … in the civil service, the start of the next spending review period seemed to be a sensible time to move on,’ she said. Chancellor George Osborne praises Homer for ‘[putting] the foundations in place that will see HMRC become one of the most digitally advanced tax authorities in the world. It is to Lin’s great credit that the National Audit Office last year judged HMRC to be one of the strongest departments in government – a legacy of which she can be rightly proud.’ Not all agree: Public and Commercial Services union general secretary Mark Serwotka is especially critical: ‘We do not believe Lin Homer has been a force for good at HMRC. She leaves a department wracked by low staff morale, a highly politicised senior civil service and with industrial relations the worst we have ever known.’
Also in January, Google announces that it has agreed to pay £130m in extra tax and interest to HMRC, in a move to conclude an enquiry into its tax affairs dating back to 2005. Osborne hails the agreement as a ‘major success’. However, there is mounting criticism over the deal, including from the Public Accounts Committee in February, when it says that HMRC appears to settle for less corporation tax from Google than other countries are willing to accept. The department defends its record saying it ‘does not settle for a penny less than is due under the law’ from multinationals. ‘Last year, we brought in an additional £7bn by rigorously enforcing the tax rules that apply to large businesses.’
In March, chancellor Osborne delivers his eighth Budget, saying his measures ‘back small business’. The CIOT observes that it is ‘a neutral Budget overall’ in which ‘the biggest tax increase was in corporation tax’. CIOT tax policy director John Cullinane points out that, over the next five years, ‘companies will be paying over £7bn extra as a result of the decisions announced today … even after the effect of the reduction announced from 20% to 17% with effect from 2020/21’. This is a Budget packed with technical detail. ‘The chancellor unveiled an even wider package of business tax reforms than in his previous Budget,’ writes Dominic Robertson (Slaughter and May).
The 2016 Finance Bill is published later that month and contains 179 clauses and 25 schedules and runs to 571 pages.
April sees changes at the top of HMRC following Homer's departure. Edward Troup, HMRC’s tax assurance commissioner, becomes executive chair of HMRC, and Jon Thompson moves from the Ministry of Defence to become HMRC's chief executive and permanent secretary. Treasury permanent secretary Sir Nicholas Macpherson explains the new structure: ‘Jon will be responsible for HMRC’s operations and transforming the organisation … he will spend the money’; while ‘Edward Troup, as executive chairman, will be very concerned with the strategic policy and reputational leadership of HMRC’.
The headlines though are dominated by ‘Panamania’, with HMRC asking for access to leaked data which allegedly reveals large-scale tax evasion and money laundering facilitated by law firm Mossack Fonseca. ‘The existence of all of this data might be regarded as a bonanza for HMRC,’ says Andrew Hubbard (RSM), ‘but it also gives them a huge headache. How are they actually going to deal with it? Prosecution is an extremely difficult, costly and time consuming exercise and it’s hard to believe that HMRC could ever prosecute more than a handful of those who appear to be involved – a case perhaps of “hanging an admiral to encourage the others”. So it would not be a surprise to find most cases being dealt with under civil procedures, particularly where people come forward voluntarily.’
Meanwhile, high profile investors in the Eclipse 35 film scheme are left facing large tax bills and legal fees, following the Supreme Court’s decision to refuse appeal from the Court of Appeal judgment. HMRC hails the decision as '£635m for the public'. This is 'a watershed moment for tax litigation', says Michael Avient (UHY Hacker Young).
The EU referendum of 23 June is to dominate the news headlines for the remainder of the year. It is not only economists who issue dire warnings of what will befall, should the UK vote to leave. According to David Southern QC (Temple Tax Chambers): ‘UK businesses which have expanded abroad will collapse. International businesses will withdraw from the UK. The only way to stop the haemorrhaging of investment and jobs will be to make the UK into a tax haven, and remove all the special charges on the ownership of property in the UK by companies. This will be a curious climax to the last government’s campaign against tax avoidance. VAT will continue as a national tax, but without the framework of the Directives or the guidance of the CJEU, so it will diverge ever more from EU principles.’
Almost immediately following the Leave vote, the chancellor delivers a statement to reassure the markets. The British economy is ‘fundamentally strong’, he says, and contingency plans are in place to ensure the country is ‘equipped for whatever happens’. However, Osborne makes no mention of the emergency Budget, which he had previously suggested would immediately follow a vote for ‘Brexit’. Instead, the chancellor makes clear that any decisions about what action the government should take to address the impact on the economy and the public finances ‘should wait for the Office for Budget Responsibility to assess the economy in the autumn’.
What will the tax system look like post-Brexit? ‘There is little doubt that Brexit will result in change, even if at present it is impossible to predict what that will entail,’ writes Paul Morton (RELX). ‘There may be pressure on UK policy makers to offer an even more attractive tax system, although such reform is likely to be constrained by the need to maximise the facilitation for cross-border trade and investment. In the interim, large businesses might wish to consider establishing a cross-functional “Brexit” committee to monitor developments and plan for risks.’
What about VAT? ‘Like the country itself, VAT as a tax will go on after Brexit; it will survive,’ says barrister Etienne Wong (Old Square Tax Chambers). ‘Although it is a wholly EU construct, VAT is worth too much to the Treasury to abolish. It will not be completely rewritten. Fun as that sounds – a brand new goods and services tax! – it will be too disruptive, and the experience to date with the son of stamp duty – SDLT – is hardly inspiration for more fiscal reinventions. The odd nip and tuck are, however, inevitable.’
In July, quiet remainer Theresa May supersedes David Cameron as prime minister. Her ministerial reshuffle sees changes at the Treasury, with David Gauke getting a well deserved promotion. After six years as ‘minister for tax’, first as exchequer secretary and then as financial secretary, Gauke becomes chief secretary, second in command at the Treasury. Jane Ellison – former parliamentary under secretary at the Department of Health and one of May’s first supporters in her leadership bid – now assumes day to day responsibility for tax as the new treasury secretary.
But what do we know of the new chancellor, Philip Hammond? ‘If the diplomats at the Foreign Office raised more than an eyebrow at Boris Johnson’s appointment, the mandarins at the Treasury got a chancellor they are comfortable with,’ writes political commentator Philip Stephens. ‘Hammond is known as one of Westminster’s grown-ups – a safe pair of hands entirely at ease with complex spreadsheets. Publicly unflashy, privately he has a dry sense of humour. He is credited with solid, if unstartling, performances at the helms of the ministries of transport and defence and the foreign office. Most importantly, he has the trust of Theresa May. The same cannot be said of all of his cabinet colleagues.’
August is usually a quiet time in tax, but this year sees a deluge of tax consultations. The consultation on penalising the ‘enablers’ of tax avoidance is perhaps the most controversial of all. It is not just the wide definition of ‘enabler’ but also the potentially wide scope of the phrase ‘defeated tax avoidance’ which concerns some in the profession. ‘What we are witnessing is a government shake down of the tax avoidance supply chain,’ write Richard Woolich and Geoffrey Tack (DLA Piper). ‘Their present tone is one of launching investigations akin to civil evasion and criminal enquiries. There is talk of using information powers in FA 2008 Sch 36 to identify enablers or, indeed, the introduction of a standalone power to obtain information against enablers. Such language marks out enablers as an anti-social element that should be brought to book.’
There are also six consultations on the ‘making tax digital’ project, which heralds what is perhaps the biggest change to tax administration in a generation. This bold vision ‘represents a paradigm shift in how businesses interact with HMRC and how tax is administered in the UK’, says Tina Riches (Smith & Williamson).
Also that month, the European Commission concludes that tax rulings issued by the Irish tax authorities in favour of two Apple subsidiaries, which operated in Ireland until 2015, constitute illegal state aid under EU law. The Commission calculates that these rulings allowed Apple to allocate profits in a way that reduced the taxes payable in Ireland by up to €13bn over ten years. As a result, Ireland must recover this amount, plus interest, from Apple. The EU competition commissioner, Margrethe Vestager, says the decision ‘sends a clear message [that] member states cannot give unfair tax benefits to selected companies’. This approach ‘has been long confirmed by the EU courts and the Commission’s case practice’. Both the Irish government and Apple say they will appeal the decision to the European Court.
The autumn months see concerns build over the ambitious timetable for making tax digital. At a Treasury Select Committee (TSC) hearing in October, Rebecca Benneyworth (chair of HMRC’s Digital Advisory Group), the ICAEW’s Frank Haskew, the ACCA’s Chas Roy-Chowdhury and the FSB’s Mike Cherry, all concurred that digital holds great potential for improving tax administration and compliance. However, as Paul Aplin (ICAEW) writes, 'All cautioned that some aspects of MTD need to be rethought'. In particular, 'there was no support for a mandation, with witnesses expressing the view that HMRC should make the process easy so that businesses would want to comply voluntarily.' TSC chair Andrew Tyrie advises the government: 'Don't rush it. Getting it right is surely the most important thing.'
HMRC suffers a defeat before the Supreme Court in Ingenious Media. The court ruled that the former permanent secretary for tax, David Hartnett, breached HMRC’s duty of confidentiality when making off the record comments to journalists from The Times. 'The judgment emphasises that HMRC’s duty of confidentiality is a fundamental duty owed to the taxpayer and aligned with the common law duty', writes Gideon Sanitt (Macfarlanes). 'In practice, it is likely that HMRC will now be increasingly wary of making disclosures, unless they fall squarely within a specific exclusion or are overwhelmingly justified.'
Meanwhile, the European Commission relaunches its ambitious proposals for a common consolidated corporate tax base. (This EC was especially active in 2016, and had already launched various tax initiatives this year, including its anti-tax avoidance package, which contains the Anti-Tax Avoidance Directive designed to ensure consistent application of BEPS among member states.) The CCCTB failed to be adopted when last proposed in 2011, but the relaunched proposals involve a more pragmatic two-step approach to implementation: first, the creation of a common corporate tax base (CCTB) to harmonise the calculation of taxable profits across member states; and second, the consolidation of this tax base into the CCCTB to allocate the tax base between EU member states. 'The radical nature of the CCCTB means that it will struggle to obtain the required unanimous agreement', writes Dan Neidle (Clifford Chance). 'The CCTB is less radical, but has considerable disadvantages for taxpayers and tax authorities, with few obvious benefits.'
In the US, Donald Trump’s stunning election result paves the way for large scale tax reform. 'The stage is now set for the most comprehensive rewrite of the US tax code since 1986', explain Donald Korb and Andrew Solomon (Sullivan & Cromwell). 'However, the president-elect’s plans would likely need to be amalgamated with the provisions of Republican’s blueprint for tax reform. The proposals would significantly increase the budget deficit – and they would, therefore, face scrutiny by, among others, the non-partisan staff of the Joint Tax Committee which provides something of a ‘firewall’ for unpaid for tax cuts.'
Closer to home, all eyes are on Philip Hammond’s first (and as it turns out, last) Autumn Statement. There is a marked change in style, but also a great deal of continuity on tax issues. One of the key announcements is a boost to investment, despite a public borrowing overshoot of over £100bn. 'Has the chancellor given up on prudence?', asks John Hawksworth (PwC). 'Not really, as he is still aiming to eliminate the current budget deficit by 2019/20. He is also still aiming to get the overall public debt stock as a share of GDP falling by the end of this parliament and to continue to keep tight control of non-investment spending. This is not yet the end of austerity, which will now extend into the 2020s, albeit at a more gradual pace, to allow room for manoeuvre during the uncertain period of the Brexit negotiations.'
Despite specultation that the chancellor might match President-elect Trump's ambitious 15% CT rate, Hammond confirms that the UK would be sticking to the current plan of cutting the corporation tax rate to 17% by 2020. 'He also confirmed that the government would be sticking to the business tax roadmap because he knows how much business values certainty and stability', writes Mike Lane (Slaughter and May). 'He would do well to remember that the certainty and stability businesses value goes to the tax base as much as, if not more than, the headline tax rate which is applied to it.'
In truth, the Statement is ‘fairly dull from a tax point of view,’ says Jeremy Cape (Dentons), but ‘we have to remember that is what we asked for’. Jason Collins (Pinsent Masons), commenting on compliance and enfrcement aspects, says the Statement is 'notable for its continued focus on measures to tackle and punish intermediaries between HMRC and taxpayers’. For many though, the statement will be remembered for the announcement that the government will be reverting to a single fiscal event. 'I will not make significant changes twice a year just for the sake of it,’ the new chancellor says.
‘Legislation-day’ in December sees the publication of 398 pages of the draft Finance Bill 2017. The government also chooses that day to publish around 30 response documents with the outcomes of various consultations held during the year.
What can we expect for 2017? There is confirmation of further draft clauses for FB 2017 in January on making tax digital; social investment tax relief; partnerships; and the remaining draft legislation for corporate interest expense and loss relief reform. And despite the announced return to a single fiscal event, the Autumn Statement did also promise us two full Budgets next year.
Home >Articles > 2016: that was the year that was...
2016: that was the year that was...
'In 2016, HMRC will continue with its plans to become a smaller, but more highly skilled department, based in 13 regional centres, in order to give customers the modern services they expect, at a lower cost to the taxpayer', writes HMRC chief executive Dame Lin Homer for Tax Journal in January.
Later that month, Homer announces that she will be leaving the department in April. ‘After ten years … in the civil service, the start of the next spending review period seemed to be a sensible time to move on,’ she said. Chancellor George Osborne praises Homer for ‘[putting] the foundations in place that will see HMRC become one of the most digitally advanced tax authorities in the world. It is to Lin’s great credit that the National Audit Office last year judged HMRC to be one of the strongest departments in government – a legacy of which she can be rightly proud.’ Not all agree: Public and Commercial Services union general secretary Mark Serwotka is especially critical: ‘We do not believe Lin Homer has been a force for good at HMRC. She leaves a department wracked by low staff morale, a highly politicised senior civil service and with industrial relations the worst we have ever known.’
Also in January, Google announces that it has agreed to pay £130m in extra tax and interest to HMRC, in a move to conclude an enquiry into its tax affairs dating back to 2005. Osborne hails the agreement as a ‘major success’. However, there is mounting criticism over the deal, including from the Public Accounts Committee in February, when it says that HMRC appears to settle for less corporation tax from Google than other countries are willing to accept. The department defends its record saying it ‘does not settle for a penny less than is due under the law’ from multinationals. ‘Last year, we brought in an additional £7bn by rigorously enforcing the tax rules that apply to large businesses.’
In March, chancellor Osborne delivers his eighth Budget, saying his measures ‘back small business’. The CIOT observes that it is ‘a neutral Budget overall’ in which ‘the biggest tax increase was in corporation tax’. CIOT tax policy director John Cullinane points out that, over the next five years, ‘companies will be paying over £7bn extra as a result of the decisions announced today … even after the effect of the reduction announced from 20% to 17% with effect from 2020/21’. This is a Budget packed with technical detail. ‘The chancellor unveiled an even wider package of business tax reforms than in his previous Budget,’ writes Dominic Robertson (Slaughter and May).
The 2016 Finance Bill is published later that month and contains 179 clauses and 25 schedules and runs to 571 pages.
April sees changes at the top of HMRC following Homer's departure. Edward Troup, HMRC’s tax assurance commissioner, becomes executive chair of HMRC, and Jon Thompson moves from the Ministry of Defence to become HMRC's chief executive and permanent secretary. Treasury permanent secretary Sir Nicholas Macpherson explains the new structure: ‘Jon will be responsible for HMRC’s operations and transforming the organisation … he will spend the money’; while ‘Edward Troup, as executive chairman, will be very concerned with the strategic policy and reputational leadership of HMRC’.
The headlines though are dominated by ‘Panamania’, with HMRC asking for access to leaked data which allegedly reveals large-scale tax evasion and money laundering facilitated by law firm Mossack Fonseca. ‘The existence of all of this data might be regarded as a bonanza for HMRC,’ says Andrew Hubbard (RSM), ‘but it also gives them a huge headache. How are they actually going to deal with it? Prosecution is an extremely difficult, costly and time consuming exercise and it’s hard to believe that HMRC could ever prosecute more than a handful of those who appear to be involved – a case perhaps of “hanging an admiral to encourage the others”. So it would not be a surprise to find most cases being dealt with under civil procedures, particularly where people come forward voluntarily.’
Meanwhile, high profile investors in the Eclipse 35 film scheme are left facing large tax bills and legal fees, following the Supreme Court’s decision to refuse appeal from the Court of Appeal judgment. HMRC hails the decision as '£635m for the public'. This is 'a watershed moment for tax litigation', says Michael Avient (UHY Hacker Young).
The EU referendum of 23 June is to dominate the news headlines for the remainder of the year. It is not only economists who issue dire warnings of what will befall, should the UK vote to leave. According to David Southern QC (Temple Tax Chambers): ‘UK businesses which have expanded abroad will collapse. International businesses will withdraw from the UK. The only way to stop the haemorrhaging of investment and jobs will be to make the UK into a tax haven, and remove all the special charges on the ownership of property in the UK by companies. This will be a curious climax to the last government’s campaign against tax avoidance. VAT will continue as a national tax, but without the framework of the Directives or the guidance of the CJEU, so it will diverge ever more from EU principles.’
Almost immediately following the Leave vote, the chancellor delivers a statement to reassure the markets. The British economy is ‘fundamentally strong’, he says, and contingency plans are in place to ensure the country is ‘equipped for whatever happens’. However, Osborne makes no mention of the emergency Budget, which he had previously suggested would immediately follow a vote for ‘Brexit’. Instead, the chancellor makes clear that any decisions about what action the government should take to address the impact on the economy and the public finances ‘should wait for the Office for Budget Responsibility to assess the economy in the autumn’.
What will the tax system look like post-Brexit? ‘There is little doubt that Brexit will result in change, even if at present it is impossible to predict what that will entail,’ writes Paul Morton (RELX). ‘There may be pressure on UK policy makers to offer an even more attractive tax system, although such reform is likely to be constrained by the need to maximise the facilitation for cross-border trade and investment. In the interim, large businesses might wish to consider establishing a cross-functional “Brexit” committee to monitor developments and plan for risks.’
What about VAT? ‘Like the country itself, VAT as a tax will go on after Brexit; it will survive,’ says barrister Etienne Wong (Old Square Tax Chambers). ‘Although it is a wholly EU construct, VAT is worth too much to the Treasury to abolish. It will not be completely rewritten. Fun as that sounds – a brand new goods and services tax! – it will be too disruptive, and the experience to date with the son of stamp duty – SDLT – is hardly inspiration for more fiscal reinventions. The odd nip and tuck are, however, inevitable.’
In July, quiet remainer Theresa May supersedes David Cameron as prime minister. Her ministerial reshuffle sees changes at the Treasury, with David Gauke getting a well deserved promotion. After six years as ‘minister for tax’, first as exchequer secretary and then as financial secretary, Gauke becomes chief secretary, second in command at the Treasury. Jane Ellison – former parliamentary under secretary at the Department of Health and one of May’s first supporters in her leadership bid – now assumes day to day responsibility for tax as the new treasury secretary.
But what do we know of the new chancellor, Philip Hammond? ‘If the diplomats at the Foreign Office raised more than an eyebrow at Boris Johnson’s appointment, the mandarins at the Treasury got a chancellor they are comfortable with,’ writes political commentator Philip Stephens. ‘Hammond is known as one of Westminster’s grown-ups – a safe pair of hands entirely at ease with complex spreadsheets. Publicly unflashy, privately he has a dry sense of humour. He is credited with solid, if unstartling, performances at the helms of the ministries of transport and defence and the foreign office. Most importantly, he has the trust of Theresa May. The same cannot be said of all of his cabinet colleagues.’
August is usually a quiet time in tax, but this year sees a deluge of tax consultations. The consultation on penalising the ‘enablers’ of tax avoidance is perhaps the most controversial of all. It is not just the wide definition of ‘enabler’ but also the potentially wide scope of the phrase ‘defeated tax avoidance’ which concerns some in the profession. ‘What we are witnessing is a government shake down of the tax avoidance supply chain,’ write Richard Woolich and Geoffrey Tack (DLA Piper). ‘Their present tone is one of launching investigations akin to civil evasion and criminal enquiries. There is talk of using information powers in FA 2008 Sch 36 to identify enablers or, indeed, the introduction of a standalone power to obtain information against enablers. Such language marks out enablers as an anti-social element that should be brought to book.’
There are also six consultations on the ‘making tax digital’ project, which heralds what is perhaps the biggest change to tax administration in a generation. This bold vision ‘represents a paradigm shift in how businesses interact with HMRC and how tax is administered in the UK’, says Tina Riches (Smith & Williamson).
Also that month, the European Commission concludes that tax rulings issued by the Irish tax authorities in favour of two Apple subsidiaries, which operated in Ireland until 2015, constitute illegal state aid under EU law. The Commission calculates that these rulings allowed Apple to allocate profits in a way that reduced the taxes payable in Ireland by up to €13bn over ten years. As a result, Ireland must recover this amount, plus interest, from Apple. The EU competition commissioner, Margrethe Vestager, says the decision ‘sends a clear message [that] member states cannot give unfair tax benefits to selected companies’. This approach ‘has been long confirmed by the EU courts and the Commission’s case practice’. Both the Irish government and Apple say they will appeal the decision to the European Court.
The autumn months see concerns build over the ambitious timetable for making tax digital. At a Treasury Select Committee (TSC) hearing in October, Rebecca Benneyworth (chair of HMRC’s Digital Advisory Group), the ICAEW’s Frank Haskew, the ACCA’s Chas Roy-Chowdhury and the FSB’s Mike Cherry, all concurred that digital holds great potential for improving tax administration and compliance. However, as Paul Aplin (ICAEW) writes, 'All cautioned that some aspects of MTD need to be rethought'. In particular, 'there was no support for a mandation, with witnesses expressing the view that HMRC should make the process easy so that businesses would want to comply voluntarily.' TSC chair Andrew Tyrie advises the government: 'Don't rush it. Getting it right is surely the most important thing.'
HMRC suffers a defeat before the Supreme Court in Ingenious Media. The court ruled that the former permanent secretary for tax, David Hartnett, breached HMRC’s duty of confidentiality when making off the record comments to journalists from The Times. 'The judgment emphasises that HMRC’s duty of confidentiality is a fundamental duty owed to the taxpayer and aligned with the common law duty', writes Gideon Sanitt (Macfarlanes). 'In practice, it is likely that HMRC will now be increasingly wary of making disclosures, unless they fall squarely within a specific exclusion or are overwhelmingly justified.'
Meanwhile, the European Commission relaunches its ambitious proposals for a common consolidated corporate tax base. (This EC was especially active in 2016, and had already launched various tax initiatives this year, including its anti-tax avoidance package, which contains the Anti-Tax Avoidance Directive designed to ensure consistent application of BEPS among member states.) The CCCTB failed to be adopted when last proposed in 2011, but the relaunched proposals involve a more pragmatic two-step approach to implementation: first, the creation of a common corporate tax base (CCTB) to harmonise the calculation of taxable profits across member states; and second, the consolidation of this tax base into the CCCTB to allocate the tax base between EU member states. 'The radical nature of the CCCTB means that it will struggle to obtain the required unanimous agreement', writes Dan Neidle (Clifford Chance). 'The CCTB is less radical, but has considerable disadvantages for taxpayers and tax authorities, with few obvious benefits.'
In the US, Donald Trump’s stunning election result paves the way for large scale tax reform. 'The stage is now set for the most comprehensive rewrite of the US tax code since 1986', explain Donald Korb and Andrew Solomon (Sullivan & Cromwell). 'However, the president-elect’s plans would likely need to be amalgamated with the provisions of Republican’s blueprint for tax reform. The proposals would significantly increase the budget deficit – and they would, therefore, face scrutiny by, among others, the non-partisan staff of the Joint Tax Committee which provides something of a ‘firewall’ for unpaid for tax cuts.'
Closer to home, all eyes are on Philip Hammond’s first (and as it turns out, last) Autumn Statement. There is a marked change in style, but also a great deal of continuity on tax issues. One of the key announcements is a boost to investment, despite a public borrowing overshoot of over £100bn. 'Has the chancellor given up on prudence?', asks John Hawksworth (PwC). 'Not really, as he is still aiming to eliminate the current budget deficit by 2019/20. He is also still aiming to get the overall public debt stock as a share of GDP falling by the end of this parliament and to continue to keep tight control of non-investment spending. This is not yet the end of austerity, which will now extend into the 2020s, albeit at a more gradual pace, to allow room for manoeuvre during the uncertain period of the Brexit negotiations.'
Despite specultation that the chancellor might match President-elect Trump's ambitious 15% CT rate, Hammond confirms that the UK would be sticking to the current plan of cutting the corporation tax rate to 17% by 2020. 'He also confirmed that the government would be sticking to the business tax roadmap because he knows how much business values certainty and stability', writes Mike Lane (Slaughter and May). 'He would do well to remember that the certainty and stability businesses value goes to the tax base as much as, if not more than, the headline tax rate which is applied to it.'
In truth, the Statement is ‘fairly dull from a tax point of view,’ says Jeremy Cape (Dentons), but ‘we have to remember that is what we asked for’. Jason Collins (Pinsent Masons), commenting on compliance and enfrcement aspects, says the Statement is 'notable for its continued focus on measures to tackle and punish intermediaries between HMRC and taxpayers’. For many though, the statement will be remembered for the announcement that the government will be reverting to a single fiscal event. 'I will not make significant changes twice a year just for the sake of it,’ the new chancellor says.
‘Legislation-day’ in December sees the publication of 398 pages of the draft Finance Bill 2017. The government also chooses that day to publish around 30 response documents with the outcomes of various consultations held during the year.
What can we expect for 2017? There is confirmation of further draft clauses for FB 2017 in January on making tax digital; social investment tax relief; partnerships; and the remaining draft legislation for corporate interest expense and loss relief reform. And despite the announced return to a single fiscal event, the Autumn Statement did also promise us two full Budgets next year.
