RS sets out Autumn Statement hopes

Jon Miles, tax director at accountants Richardson Swift, outlines a few measures which could help Bath-based businesses when Philip Hammond delivers his Autumn Statement.

Corporation Tax

“The business owners we advise have been hit by the dividend tax hike when taking money out of their company,” said Mr Miles. “So it would be welcomed if the former Chancellor George Osborne’s suggestion to cut the company tax rate to 15 per cent was implemented. But Philip Hammond is instead expected to keep the previously announced reduction to 17 per cent from 1 April 2020, which nevertheless is still quite an attractive rate. As well as possibly encouraging companies from overseas to invest, a rate less than 17% would also help to further soften the impact of higher dividend tax rates for Bath’s owner-managed companies.”

Transport Infrastructure

“We are encouraged to hear that fiscal stimulus measures announced in the Autumn Statement are likely to concentrate on improving our roads and railways. We advise a number of hauliers in the Bath area so any new money to fix the region’s creaking transport infrastructure and congested roads would be most welcome.”

Company Liquidations

“In advance of further HMRC guidance which is anticipated before the end of the year, it would be a pleasant, albeit unexpected surprise if some further reassurance was given by the Chancellor on the application of the recently introduced tax rules for company voluntary liquidations."

“Historically entrepreneurs have enjoyed tax rates as low as 10 per cent when they extract undistributed profits from their company upon closing it down. But the recent legislation, to treat certain distributions as income rather than capital, could expose many business owners to higher tax rates in a wide range of commercially driven situations where they might subsequently become involved in another business undertaking a “similar” activity."

“This is a major issue for companies, particularly Bath’s property developers and personal service firms who fear their tax bills will increase and they urgently need more clarity and guidance."

Entrepreneur or Investor…or both?

“It would also perhaps simplify matters if the Entrepreneurs Relief and Investor Relief rules, both of which result in 10 per cent capital gains tax payable on the sale of certain unlisted shares, could somehow be consolidated into a single set of rules.”

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