Tax avoidance and tax evasion will be high on the agenda, and we can expect to hear more about the Chancellor’s commitment to action on the international stage in his Autumn Statement announcement on Thursday 5 December, says ACCA (the Association of Chartered Certified Accountants).
'The aim is to tackle both the criminals who ignore the rules and the weaknesses in the current system which have given rise to so much comment and debate over the last year or two' said Chas Roy-Chowdhury, head of taxation at ACCA.
ACCA believes more concrete action will also be carried out closer to home.
ACCA also expects to see on the agenda:
- BEPS (Base erosion and profit shifting) – further to the continuing debate on tax evasion and tax avoidance, ACCA expects the international side of things, including BEPS will also be looked at, where businesses are moving their profit to countries where the tax rates are lower, even if they are not trading in these countries.
- Employment taxes – expecting to see the trend continue with the government’s aim to capture all employment taxes due, particularly from individuals working on short-term contracts or through agencies.
- Personal Services Companies (PCS) – ACCA believes there will be another clampdown on employment intermediaries. There may also be moves to reform the Construction Industry Scheme.
- Personal allowance – expecting to hear the Chancellor extend it to £12,500 by 2016. However ACCA believes it should not be restricted to the basic rate which has year- after-year dragged previously 20 per cent rate taxpayers in to the 40 per cent band.
- Social security – ACCA expects the Chancellor to announce his consideration of a £500 a week cap on social security payments being reduced further.
- Business rates freeze
- Scrapping stamp duty on homes worth under £500k
- Capital Gains Tax on properties owned by non-UK residents
- Green Deal – likely to be replaced with green levies for energy companies, in light of the hike in energy prices.
- Public sector – not expecting the Chancellor to announce further spending cuts, he will focus on the positive aspect by celebrating the successes which have been the efficiencies delivered and the initiatives taken to date. In the March Budget he made a lot of bringing annually managed expenditure (AME) under control and it will be interesting to see how effective the measures have been. There have been increasing service failures of key public services in areas such as healthcare and private companies delivering significant public services. There is also continuing considerable wastage i.e. £450 million on the introduction of universal credits. Arguably, more mistakes are being made because of the financial pressures placed on public services. Overall the outlook for public services is bleak with austerity set to continue in the long-term.
Chas Roy-Chowdhury concludes: 'The Autumn Statement is not really going to bring anything new to the table. It is really going to be a case of what was already announced back in March for the Budget, with a few added extras.
'What ACCA really wants to see from the Autumn Statement is a coherent long-term strategy on tax which encourages long-term investment by businesses and savings by individuals as well as moves forward through the work of the Office of Tax Simplification (OTS) on a streamlined and simpler tax regime.'