Following the economic turmoil resulting from Kwasi Kwarteng’s (now largely reversed) “Growth Plan” on 23 September, Jeremy Hunt was under considerable pressure today to deliver an Autumn Statement which restored the UK’s economic credibility.
We had been warned that everyone would be paying “a bit more tax”, and Mr Hunt did not fail to deliver on this front. Although he was careful to emphasise that headline rates of personal taxation would not be going up, announcements relating to the freezing or lowering of rate thresholds (for income tax, national insurance contributions, capital gains tax and inheritance tax) will result in taxes as a proportion of GDP rising by just over 1% over the next five years.
Despite promises of a “rabbit-free budget”, there had been speculation about possible reforms to the taxation of non-doms. However, aside from the introduction of a very specific capital gains tax anti-avoidance provision (relating to the exchange of securities in a UK company for securities in a non-UK holding company), no announcements were made today in this regard. The Labour Party has, however, proposed scrapping the non-dom status entirely so the Government is likely to remain under political pressure to conduct a review of the regime.
Finally, HMRC have been allocated an additional £79m over the next five years to tackle tax fraud and to address tax compliance risks among wealthy taxpayers. Accordingly, private clients and their advisors should expect no let-up in the level of scrutiny of their affairs by HMRC.