Edward Garston talks about the mixed business reaction to the Autumn Statement amongst the business community.
Although there was much from Chancellor Hammond’s first Autumn statement to offer the business community some festive cheer, there were equally plenty of measures which may not be so warmly received.
A headline grabbing £1.1bn investment into transport networks, including £220m for traffic easing measures on key roads will certainly be welcomed by all those struggling with delays and congestion. Other highlights include an extra £110m funding for rail, and a commitment for new road building in the Oxford to Cambridge corridor. Of particular benefit for the haulage industry, the Chancellor announced a freezing of fuel duty for the seventh consecutive year at a time when a fall in Sterling is already feeding through to higher pump prices.
Meanwhile, the country’s digital infrastructure is set to be enhanced by generous tax allowances on both 5G, the next generation of mobile communications, and a new fibre broadband infrastructure. With business increasingly moving online this move is set to reap rewards across all sectors and keep the UK attractive for overseas investment.
This was an autumn statement which clearly had one eye on the post-Brexit business environment. In view of this, the Chancellor attempted to dampen fears that a significant number of businesses will relocate by underlining the government’s commitment to cut corporation tax from 20% to 17%. It is hoped that keeping business taxation competitive will help the UK be seen as an attractive place for businesses to locate.
But there were also some less business friendly measures. The increase in the national living wage, estimated to be worth £500 to a full time worker, will increase costs for employers. This will have a wide ranging impact, but those sectors most likely to feel the effects range from catering and hospitality, through to the healthcare industry.
As for direct business tax changes, both employers and employees are set to lose out following a substantial tightening in the rules relating to salary sacrifice schemes. Childcare vouchers, pension payments, and certain transport schemes are set to survive, but other types of scheme benefits will be withdrawn.
In an environment of Brexit induced uncertainty, dampened growth prospects, and resilient levels of government debt, Chancellor Hammond was never going to use his debut to deliver radical changes. For businesses, at least, he will hope that some comfort can be drawn from the relative stability being offered.
For more information please contact Edward Garston in our Commercial Team on firstname.lastname@example.org or call 01708 229444 for advice if you have any queries on these changes or if you would like help updating your policies. This article was written by Edward Garston our Company Commercial Senior Associate at . The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. The law may have changed since this article was published. This article is based on the law as at December 2016.