The autumn statement is always a time of excitement among UK professionals.
The Industry Act 1975 requires the government to publish two annual economic forecasts, one of which is the annual budget that occurs sometime in March. The other statement has been given various names by various chancellors of the exchequer – in recent years it has been known as the autumn statement, summer statement and then referred to as the pre-budget report (PBR). Since 2010, the then chancellor George Osborne replaced the PBR and re-introduced the autumn statement. This focuses on growth and finances, as projected by the independent Office of Budget Responsibility (OBR).
Regardless of its name, the current autumn statement is always a time of excitement among UK professionals. There will be few professionals who are not sitting by their Twitter feeds or streaming it live from the BBC then digesting it late into the evening. While it still remains the precursor to the main budget statement in March, the autumn statement provides us with a plethora of information necessary to start the following tax year. For example, at, or shortly after, the statement, we will get to know the UK tax rates and bands (not Scotland), the UK-wide National Insurance rates and bands and the rates of things like SSP and SMP.
Speaking before the House of Lords Economic Affairs Committee on Thursday 8 September 2016, the recently appointed chancellor, Philip Hammond, announced that he would present his first Autumn Statement on 23 November 2016.
To quote Mr Hammond: “The autumn statement will set out the government’s economic and fiscal plans based on the latest forecasts from the Office for Budget Responsibility. In the run-up to the autumn statement I will be engaging with Britain’s business leaders and employee representatives through a series of industry round tables, meetings and visits.”
Aside from the usual announcements (which may not be spoken about but will be eagerly absorbed in the statement’s accompanying documents), we can expect clarity on some important issues:
• Mr Hammond has spoken of the need to “reset” the economy following the Brexit advisory vote in June 2016. What exactly does this mean and how will this impact UK professionals and individuals?
• What will be the value of the grants given to the devolved administrations, particularly that for Scotland? This figure will play a great part in forming Derek Mackay’s Scottish budget, eagerly-anticipated as it will influence the Scottish tax rates and bands that he sets from 2017.
• Late summer 2016 has been alive with consultations. Worryingly, some of these contain proposals for changes from April 2017 – for example, the restrictions to the use of salary sacrifice schemes and off-payroll working. These are significant changes, even more so given that we will not know if they are actually happening until we hear or read what Mr Hammond has to say. Will UK professionals get the required information to enable us to effect them from the start of the new tax year?
• We had almost grown used to Mr Osborne’s sometimes witty, mostly serious style of delivery, plus analysing how he was dressed, how his hair looked and whether he would be using as much make-up this time (allegedly). How will Mr Hammond compare?
Talking of engagement, I would encourage people with a view to respond to the latest batch of consultations. Plus, consider making a representation to government “with the aim of commenting on government policy and / or suggesting new policy for inclusion in the upcoming budget or autumn statement”.
I think Autumn Statement 2016 is going to be more significant than usual.