Chris Connors (pictured), a corporate tax specialist with national law firm Clarke Willmott LLP looks at the key takeaways from this year’s Autumn Budget for corporate and commercial B2B clients.
This year’s Budget has the policy equivalent of the hokey-cokey – proposed tax changes have been leaked into the public sphere for what seems like months, only for many of them to be swept back under the carpet as soon as they started to receive backlash. You may remember that there was, at one point, going to be a rise to general income tax rates and a proposal for employers’ NICs to be levied on LLPs, both of which vanished pretty rapidly.
To add to the drama, the OBR leaked the key new measures before the Budget had even happened, so please bear in mind that no matter how hard or stressful your day has been, at least you aren’t the person who’s responsible for that!
So here are the key corporate tax highlights – 
Income tax thresholds frozen
The personal tax thresholds are going to be frozen for a further three years (now lasting until 2030-31). That means the rates are, for the foreseeable future, going to be as follows:
Freezing thresholds is known as “tax creep” – rates don’t go up, but more people pay more tax as their salaries/wider income increase. As a tax-raising tactic, it’s much more in the public consciousness nowadays as it’s been used increasingly in recent years, and no doubt there will be some political discourse about this in the weeks to come.
Some income tax rates going up
Salary sacrifice capped 
One of the most well-established methods for individuals looking to keep their income in the lower tax brackets is to sacrifice some of their salary for other benefits – for example, payment into a pension, which has historically been very tax-efficient.
However, a new cap is being introduced, meaning that contributions over £2,000 that are part of a salary sacrifice scheme will be subject to both employer and employee NICs.
What does that mean in practice? When the NIC rates went up last year, most employers passed on at least some of the cost to employees, but the headline you’ll possibly see in the newspapers is how this will be another blow to recruiting, retaining, and incentivising employees, especially for small businesses (and doubly so when paired with the rates freezes).
Mansion tax (a.k.a. the High Value Council Tax Surcharge, or HVCTS)
Effective from April 2028, owners of properties being valued over £2m (by the valuation office) will be subject to a charge of no less than £2.5k, rising up to £7.5k if your house is worth more than £5m. That’s an annual charge, and every year there will be a CPI uprating.
There are so many questions about how this will work (for example, will mortgages and other incumbrances be considered in valuing the property?). The government are very aware of this, and there’s a consultation on the implementation of the HVCTS on its way next year.
Writing Down Allowances (WDA) for capital allowances
Mileage charge on electric cars (and other car-related items)
Employee Ownership Trusts – capital gains tax relief
When selling a company into an employee ownership trust, the sellers have historically received a 100% reduction on the capital gains tax charge, but that is reducing to 50% with effect from today. Suddenly one of the major tax drivers for selling into an EOT has become a lot less attractive, although still a solid prospect – they are still more tax-efficient than sales to third parties, and there are a number of non-tax reasons why someone might want to sell into an EOT, which remain as relevant as ever.
The best of the rest
Every year, there’s a few things that aren’t mentioned as headline items and are hidden away in the small print and may be of interest. Here’s a selection for this year:
And finally – mind the tax gap
Apart from the above, the new Government seems to be keenly focussed on minimising the tax gap (the difference between the amount of tax collected and what should be collected based on and applying the current legislation). That makes sense – when you’re having to raise a record tax figure, it’s fairly fundamental that you would want to avoid tax leakage, and improving collection and reducing fraud is an obvious way to plug some of the hole without having to raise tax rates.
The Autumn Budget contained several policies to try and close that tax gap, by (i) cracking down on tax avoidance and evasion, and (ii) tackling abuse and exploitation of benefit and welfare systems through the introduction of programmes to prevent, detect and correct fraud and errors in the benefit system.
Measures being introduced this year include:
… and a raft of other announcements.
For more information or to discuss circumstances in light of the Budget, contact the Clarke Willmott tax team here – Corporate Tax Law – Business Tax Solicitors – Clarke Willmott
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