Highlights From The Autumn Statement 2016

Wednesday November 30, 2016

Here's a quick run down of how the Autumn Statement will effect small businesses this year.

Personal allowance and higher rate threshold
For the 2017 / 2018 tax year, the personal allowance will rise to £11,500 and the higher rate threshold to £45,000.

National insurance contributions (NICs)
The primary and secondary NIC thresholds for employees and employers will be aligned at £157 a week in 2017/18.
Class 2 NIC will be abolished from April 2018. For 2018/19 onwards, benefit entitlement for the self-employed will be based on their Class 3 and Class 4 NIC records

Corporation tax rates
The Chancellor reconfirmed the planned reduction in corporation tax to 17% in 2020. The rate of corporation tax from 1 April 2017 will be 19%.

Reform of loss relief
The profit that businesses can offset against carried-forward losses will be restricted to 50% from April 2017, while greater flexibility will be allowed on the types of profit that can be relieved by losses incurred after that date. The restriction will be subject to a £5m allowance for each stand-alone company or group.

VAT flat rate scheme
A new 16.5% rate will be available from 1 April 2017 for businesses with limited costs, such as many labour-only businesses.

Guidance was published on 23 November, and we will share more details in due course.

Pensions

The pensions money purchase annual allowance (MPAA) will be reduced from £10,000 to £4,000 from April 2017.

This limit applies to people who have accessed their pensions flexibly and under the current rules may be obtaining tax relief on up to £10,000 of recycled pensions income. 

If you have not yet started to draw your pension the limit on annual pension contributions remains £40,000.

Insurance

Insurance premium tax will be increased from 10% to 12% from 1 June 2017.

You can read the full text of the Autumn Statement on the government website.

If you have any questions about how this will affect your business, please give us a call.

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