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Autumn Budget 2017: Overview

Autumn Budget 2017: Overview

The main measures from the Autumn Budget 2017.

Michelle Quest

Head of Tax, Pensions and Legal Services

KPMG in the UK


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Autumn Budget 2017 - Red briefcase with leaves

With a difficult backdrop to this year’s Budget, the Chancellor of the Exchequer has delivered a political budget with targeted giveaways and consultations on more difficult decisions.

The big economic announcement was the reduction in future growth rates forecasted by the Office of Budget Responsibility. Growth is not expected to exceed 1.5% until 2022.  This is driven by continued low employee productivity and business investment.  This begs the question of what the forecast would have looked like without the measures announced in the Budget.

On the spending side, the Government has decided to continue with an annual deficit and not eliminate it as previously planned.  The extra borrowing will be used to invest in housing, preparing for EU exit and the establishment of funds to improve productivity and research and development in new technology.  The NHS campaign for additional resources has also been successful.

For business, whilst the Chancellor has tinkered around the edges, it is a quiet Budget with little major change.  This should provide the stability that businesses have been looking for over the past few years of significant change.  The increase in the R&D tax credit for large business to 12% and the retention of the proposed reduction of the corporation tax rate to 17% from April 2020 will help business investment, supported by the continued Government investment in new technologies. 

The new corporate interest restriction rules, legislated in the Finance (No 2) Act 2017, and the new hybrid rules have back dated amendments with the aim of ensuring that the legislation works as expected.  These amendments will need to be scrutinised carefully when they are published with the rest of the Winter Finance Bill on 1 December 2017.

We welcome the consultations on IR35 and the taxation of work, taxation of trusts, intangible property regime etc.  This is a healthy step in the development of tax policy as it enables discussion of difficult tax policy before legislation is drafted.  It also has the political advantage on delaying contentious measures whilst the ground work is prepared for change.

The largest shock was not even announced in the Budget Speech.  Non UK residents will be chargeable to capital gains tax on the direct and indirect disposal of immoveable property in the UK from April 2019.  This expands the current non UK resident capital gains tax regime from residential property to include commercial property and also the disposal of property rich companies.  A rebasing to April 2019 is proposed, which will limit the immediate impact, but this will be a significant change to the taxation of property in the UK.  A further adverse change is the freezing of indexation for chargeable gains for companies.  The change from income tax to corporation tax for non UK resident corporate landlords has been deferred to April 2020, after which property gains will also be subject to corporation tax.

HMRC has been provided with extra resources to combat evasion and avoidance for a range of purposes including analysing all the additional information which it is getting from overseas countries and other existing disclosure arrangements.  This will help reduce the UK’s tax gap further.

Online marketplaces will become jointly and severally liable to the VAT for non UK business selling goods via that marketplace together with other anti-evasion measures. This is provide a leveller for UK businesses both online and in the high street by helping ensuring that all businesses meet their UK VAT obligations.  However, this is likely to be a significant burden for the online marketplace.

In summary, the Chancellor of the Exchequer has provided little hostage to fortune with this Budget by favouring key taxpayers, such as first time buyers with the new stamp duty land tax exemption, whilst focusing the major change on non resident landlords.


For an in-depth look at the Autumn Budget, see our overviews below:

Business overview

Multinationals oveview

Employers overview

Individuals overview 

Key measures: 

SDLT Relief for First-time Buyers

A permanent SDLT relief has been introduced for first time buyers, effectively increasing the nil-rate threshold to £300,000, for purchases up to £500,000.

Increase in Research and Development credit is boost for innovation

An increase in credit means the UK Government will fund circa 10 percent of R&D expenditure

Oil and Gas taxation – introduction of transferrable tax history 

The Chancellor has announced that companies will be able to transfer tax history on the disposal of oil fields.

Changes to corporation tax on chargeable gains 

CT on chargeable gains: Indexation allowance frozen from 1 January 2018 and depreciatory transactions time limit abolished from 22 November 2017.

Employment Status and the Taylor Review

The Government will publish a discussion paper as part of its response to the Taylor Review, exploring options for reform to employment status tests.

Off-payroll workers in the private sector

The Government has announced its intention to consult on the extension to the private sector of the IR35 reforms, introduced in the public sector earlier this year. 

Corporate Tax and the Digital Economy: UK Government Position Paper

A position paper has been issued for taxing the digital economy.  This is likely to be a game changer, particularly for social media companies and online marketplaces.

Taxing gains made by non-residents on UK immovable property

From April 2019 non-residents will be subject to capital gains tax on the disposal of all UK real estate.

Tax Advantaged - Venture Capital Incentives

Government increases investment allowance and incentives for knowledge-based start-ups but narrows relief for low-risk investments

Extending assessment time limits for offshore non-compliance 

HMRC plan to extend the assessing time limits for offshore tax non-compliance to 12 years, which is as much as tripling the current limit 

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