Autumn Budget 2017 Contents

11Assessment of the tax measures in the Autumn Statement

156.As with previous fiscal events, the Committee asked the Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Taxation (CIOT), the Association of Accounting Technicians (AAT) and the Association of Chartered and Certified Accountants (ACCA) for their overall assessments of the tax measures in the Autumn Budget 2017. It asked for the taxation policies to be measured against the criteria of fairness and that they should: support growth and encourage competition; provide certainty; provide stability; be practicable; and provide for a coherent tax system.

157.The Committee is grateful for their submissions, which have been published.143 In summary, the submissions noted that, like most fiscal events, this Autumn Budget contained some measures that scored well against the Committee’s criteria and some that did not. Rather than work through the entire Budget, they each selected what they considered to be the most significant measures.

158.Their assessments are set out in the following table:

Table 3: Assessment of tax measures

Autumn Budget Policy measure

Measure description

CIOT

ACCA

ICAEW

AAT

5

SDLT First-Time Buyers

A

A

A

R

14–16

Universal Credit Measures taken as a whole

A

23

Increase R&D expenditure credit to 12%

A/G

A

G

25

Patient capital—reforms to tax reliefs to support productive investment

A

G

G

G

34

Business Rates: bring forward CPI uprating to 2018–19

G

A

G

39

Tackling avoidance evasion and compliance

A

A

40

Corporation tax: tackle related party step up schemes

G

41

Corporation tax: depreciatory transactions

A/R

A

42

Royalty payments made to low tax jurisdictions: withholding tax

A

A/R

R

43

Online VAT fraud: extend powers to combat

A

A/G

A

R

44

Offshore Time Limits: extend to prevent non-compliance

A

A

45

Carried Interest: prevent avoidance of CGT

A

47

Dynamic coding-out of debt

A/G

48

Construction supply chain VAT fraud: introduce reverse charge

A/G

A

A

A

49

Waste crime

A/G

51

Corporation tax: freeze indexation allowance from January 2018

G

A

G

R

52

Gains by non-residents on UK property

A/G

A

53

CT on rental income of non-resident companies from UK real estate

A

A

55

VAT registration threshold: maintain at £85,000 for two years

G

A

A

G

59

Scotland police and fire: VAT refunds

G

60

Company Car benefit, diesel supplement

A

66

NICs: maintain Class 4 NICs at 9% and delay NICs Bill by one year

A

A

G

N/A

Offshore trusts: anti-avoidance

R

A

N/A

Marriage Allowance: allowing claims on behalf of deceased partner

G

G

G

N/A

Taxation of employee business expenses

G

G

N/A

Termination payments: removal of foreign service relief

R

N/A

Late submission penalties

G

N/A

Tackling disguised remuneration

R

A

G

N/A

Off payroll working in private sector

R

A

N/A

Impact of measures on tax devolution

A

N/A

Extend scope of self-funded training

G

G

N/A

Mileage rates for landlords

G

G

159.There was a general consensus that the measures around patient capital and the tax incentives for investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) were positive.

160.Conversely, there was general consensus that the withholding tax on royalty payments made to low tax overseas jurisdictions was uncertain, and the time scale for its consultation and implementation based on the detail provided was limited. The ACCA stated that the measure:

clearly demonstrates the characteristics of a short-term interim measure rather than a long term solution, with the projected revenues of £800m over the five year forecast period weighted heavily to the early stages of implementation. This is entirely consistent with a successful anti-avoidance measure; it should by definition destroy its own base as it discourages the perceived behaviour it exists for. However, as the relevant Treasury position paper acknowledges, there are significant challenges around identifying the businesses and transactions which should properly be the target of such measures. While we welcome the engagement on this crucial aspect of future tax policy design, the time allowed for submission of comments and further discussion is extremely limited.144

161.There were diverging opinions regarding the removal of the indexation allowance on assets for companies. The CIOT concluded that the measure was simple and addressed the anomaly in treatment between companies and individuals where companies have previously received an allowance but individuals have not. However, the AAT considered this argument to be flawed, given that individuals continue to benefit from an annual Capital Gains allowance which companies do not.

162.While there was concern among the taxation bodies regarding the administrative difficulties in designing and enforcing an overseas royalty payments tax avoidance measure, the Committee welcomes the Government’s initiatives to address tax avoidance through such royalty payments and structures that artificially move legitimate UK taxable profits out of UK tax jurisdiction.


143 Association of Chartered Certified Accountants (TAB0005), Chartered Institute Of Taxation (TAB0004), Institute of Chartered Accounts in England and Wales (TAB0006), Association of Accounting Technicians, ‘Response to the Autumn Budget 2017’, accessed 17 January 2018

144 Association of Chartered Certified Accountants (TAB0005)




19 January 2018