Commenting on the Autumn Statement, Jim Meakin, RSM’s Head of Tax, said:
‘The biggest surprise of the Autumn Statement has to be the Apprenticeship Levy which the government predicts will generate £3bn annually by 2021. Clearly this move has been designed to sidestep the ‘lock’ on National Insurance, and will come as a real blow to large businesses – and in particular agencies that supply temporary staff - who will see it as a ‘levy on employment’.
‘We knew that someone would suffer as a result of the planned cuts to tax credits being scrapped, and in this instance it is buy-to-let landlords. In the Budget last July, the Chancellor announced tax increases from 2017 for landlords, and now they’ve been hit again – this time with a 3 per cent stamp duty surcharge on buy-to-let properties and second homes. There’s a real risk here that rents could increase as landlords pass down the additional cost to their tenants, or that the rental property sector could shrink as landlords sell up. Either way, this could have a seriously detrimental effect on the buy-to-let industry.
‘We also heard a great deal about HMRC’s plans to move to an entirely digital service, with the emphasis now on taxpayers paying any outstanding taxes earlier. There’s no doubt that this will generate additional income for the government who will hope that this will also be a more efficient and accurate way for taxpayers to interact with HMRC. However, there still remains a huge lack of transparency around deadlines around this issue and I’m disappointed the Chancellor didn’t give more detail here.
‘Not surprisingly, we heard there would be a fresh crackdown on tax avoidance which will raise an additional £5bn. At first glance this looks impressive, but in reality, this was always on the cards as a result of the redeploying of resources in HMRC. So you could say that this was just a very good example of ‘window dressing.’