Commenting on the Autumn Statement, Stuart McKinnon, tax partner at RSM in the North East, said: ‘There was some good news for the local economy with the announcement of a new North East Enterprise Zone, an extension to the Tees Valley Enterprise Zone, and new funding from the Regional Air Connectivity Fund which will open up a route from Newcastle to Norwich. The region will also get a share of the £400m Northern Powerhouse investment fund to be set up to encourage small businesses.
‘Overall, 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’.
‘This levy will partly fund the shortfall created by the U turn on tax credit cuts. The balance of the shortfall is likely to be funded by 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% stamp duty surcharge on the purchase of buy-to-let properties and second homes.
‘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 also hope that this will be a more efficient and accurate way for taxpayers to interact with HMRC. However, there still remains a huge lack of transparency regarding deadlines around delivery 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 we are told will raise an additional £5bn as a result of the redeploying of resources in HMRC. Quite where this additional tax will come from isn’t clear but the suspicion is that it is a little bit of window dressing based around initiatives already in play.’
