Full Breakdown Of The Autumn Statement 2016
Chancellor of the Exchequer Philip Hammond delivered the Government’s annual Autumn Statement inside the House of Commons on Wednesday 23rd November 2016.
Sometimes described as a mini-Budget, he revealed to the nation the state of the country’s economy along with public finances, in line with the latest economic forecasts through the independent Office for Budget Responsibility.
of which was Mr Hammond’s first Autumn Statement along with of which was also his last as he announced of which he was abolishing the annual ritual.
Explaining of which “no some other major economy made hundreds of tax modifications twice a year” inside the spring Budget along with the Autumn Statement, Mr Hammond said the spring Budget in March 2017 would certainly also be the final one.
Instead, starting in autumn 2017, Britain will have an autumn Budget, announcing tax modifications “well in advance of the start of the tax year”. through 2018 there will be a Spring Statement, responding to the forecast through the Office of Budget responsibility, nevertheless no major fiscal event.
Below we highlight what the Chancellor said in relation to the UK fleet industry along with the wider motor industry inside the 2016 Autumn Statement.
However, many issues remain to be clarified, particularly in relation to salary sacrifice rules along with company car benefit-in-kind tax modifications. The overview of legislation in draft, providing further information on all tax modifications along with updates on all tax consultations, will be published on December 5. Draft Finance Bill clauses, explanatory notes, tax information along with impact notes, along with responses to consultations will also be published on of which date.
The government has bowed to fleet industry lobbying through the likes of ACFO along with the British Vehicle Rental along with Leasing Association along with given a partial exemption to ultra-low emission vehicles under modifications to salary sacrifice rules.
Furthermore, following a consultation on limiting the range of benefits of which attract income tax along with National Insurance contribution advantages when provided as part of salary sacrifice schemes, existing arrangements for cars will remain protected under ‘grandfathering rights’ until April 2021.
The Chancellor said: “Following consultation, the tax along with employer National Insurance advantages of salary sacrifice schemes will be removed through April 2017, except for arrangements relating to pensions (including advice), childcare, cycle to work along with ultra-low emission cars. This kind of will mean of which employees swapping salary for benefits will pay the same tax as the vast majority of individuals who buy them out of their post-tax income. Arrangements in place before April 2017 will be protected until April 2018, along with arrangements for cars, accommodation along with school fees will be protected until April 2021.”
The government has confirmed of which the threshold for ultra-low emission cars for salary sacrifice purposes will be up to 75g/km CO2.
As a result of the Chancellor’s announcement, salary sacrifice schemes will be subject to the same tax as cash income as announced inside the consultation document, which was published in August. However, there was no mention inside the Autumn Statement documentation as to whether the completely new salary sacrifice rules would certainly also apply to cash allowances.
The Chancellor said: “To promote fairness along with broaden the tax base, the government will phase out the tax advantages of salary sacrifice arrangements.”
of which is usually expected of which, as outlined inside the consultation document, employees’ tax will be aligned to the greater of the taxable value of the company car or the cash alternative (salary sacrifice/cash allowance) if their contract of employment stipulates the option. If an employee’s contract stipulates their entitlement to a company car only then the completely new rules do not apply.
Company Car Tax
To provide stronger incentives for fleets to operate ultra-low emission cars along with employees to choose them as company cars, the Chancellor has announced modifications to benefit-in-kind tax through 2020/21.
However, the tiny print of the Autumn Statement document would certainly appear to indicate of which benefit-in-kind tax rates on ultra-low emission cars will be slashed when compared to those for 2019/20, which are already known.
Budget 2016 confirmed of which company car benefit-in-kind tax rates for cars with CO2 emissions of 0-50g/km would certainly be 16%, 19% for those with CO2 emissions of 51-75g/km, 22% for those with CO2 emissions of 76-94g/km, 23% for those with CO2 emissions of 95-99g/km along with then rising in 1% point intervals up to 37% for cars with CO2 emissions of 165g/km along with above.
However, the Autumn Statement revealed of which the appropriate percentages for zero emissions cars would certainly be 2%, effectively signalling a reduction of 14 percentage points inside the tax rate for such cars.
In addition, following a consultation document published in August, the Autumn Statement suggested of which benefit-in-kind tax thresholds for cars with CO2 emissions between 1-50g/km would certainly vary between 2% along with 14% depending on the number of zero emission miles a car can travel. The full details of tax along with mileage thresholds have yet to be confirmed.
The Autumn Statement also confirmed of which the appropriate percentages on cars with emissions above 90g/km would certainly increase by one percentage point up to a maximum of 37%. However, of which raises questions as to what the tax rate will be for cars inside the 51-89 CO2 bracket. of which also requires a realignment of existing along with long-established emission thresholds, which through 76-94 g/km rise in 5g/km intervals through 95g/km.
Car fuel benefit charge 2017/18
Employees who are in receipt of company-funded fuel used privately will see their benefit-in-kind tax bills rise through April 6, 2017.
The Chancellor announced inside the Autumn Statement of which the fuel benefit charge multiplier for company cars would certainly increase through £22,0 in 2016/17 to £22,0 in 2017/18.
Van benefit charge 2017/18
The van benefit-in-kind tax charge will increase through £3,170 in 2016/17 to £3,230 in 2017/18, the Autumn Statement confirmed.
Van fuel benefit charge 2017/18
through April 6, 2017 the van fuel benefit charge multiplier will increase through £598 in 2016/17 to £610 in 2017/18, the Autumn Statement confirmed.
Electric vehicle recharging point capital allowances
There will be a two-year 100% first year allowance for companies who install electric vehicle charge-points, introduced through today (November 23) until March 2019?. of which, said the Chancellor, would certainly allow companies to deduct the cost of the charge-point through their pre-tax profits each year?.
The Chancellor announced of which fuel duty would certainly be frozen in 2017 for the seventh successive year, saving the average car driver £130 a year along with the average van driver £350.
He said of which was a “tax cut” worth £850 million next year, along with meant the current fuel duty freeze was the longest for 40 years.
Explaining why he was continuing the fuel duty freeze, Mr Hammond said: “The oil cost has risen by more than 60% since January; along with sterling has declined by 15% against the dollar.
of which means significant pressure on prices at the pump here in Britain.”
Major additional investment in improving Britain’s road network along with alleviating congestion has been announced with the creation of a £23 billion National Productivity Investment Fund.
The Chancellor said of which investing in infrastructure along with innovation was critical to improve long-term productivity along with ensuring the UK’s economy was fit for the future
The tiny print inside the Autumn Statement documents highlighted of which £2.6 billion would certainly be spent to tackle congestion along with ensure the UK’s transport networks were fit for the future. The spending plans include:
- £390 million on future transport technology, including driverless cars, renewable fuels along with energy efficient transport. of which will include: a £100 million investment inside the testing infrastructure for driverless cars, along with £150 million to provide at least 550 completely new electric along with hydrogen buses, along with reduce the emissions of 1,500 existing buses along with support taxis to become zero emission.
- £80 million to install more charging points for ultra-low emission vehicles
- £1.1 billion to reduce congestion along with upgrade local roads along with public transport including £220 million to tackle road safety along with congestion on Highways England roads
The Chancellor confirmed the government’s commitment to reduce the main rate of Corporation Tax to 17% by 2020. Corporation Tax rates, currently at 20%, will reduce to 19% in 2017/18. They will remain at of which rate in 2018/19 along with 2019/20, before being cut to 17% in 2020/21, as previously announced.
Insurance Premium Tax
Insurance Premium Tax will increase through the current 10% to 12% through June 1, 2017 impacting also on vehicle insurance along with roadside assistance policies.
Whiplash insurance claims
The Chancellor confirmed the government’s commitment to legislate next year to end the compensation culture surrounding whiplash claims – a major area of insurance fraud – saving drivers an average of £40 on their annual premiums.
The Ministry of Justice is usually currently consulting on proposals which, of which says, will reduce the unacceptably high number of whiplash claims along with allow insurers to cut premiums. The government will bring forward supporting legislation inside the Justice Bill along with expects insurers to pass on savings, which of which says are worth a total of £1 billion.
by Mr Butterscotch via Car Articles