The Autumn Statement contained a number of
items of interest for UK employers and employees. The Chancellor talked about his ambition to
make the UK tax system one of the most digitally advanced systems in the world. By 2020 most
businesses, the self-employed and landlords will report their tax affairs digitally to
HMRC on a quarterly basis. Interestingly, employees are excluded from this requirement,
unless they have self-employment or property income in excess of 10,000.
Employers with annual payroll over 3m will contribute towards a new Apprenticeship Levy
from 2017/18. This will raise around 2.7bn and create 3 million apprenticeships by 2020.
This is a significant cost for larger employers, which should be factored into budgets and
planning going forward. For share plans, there will be an alignment
of the tax and national insurance treatment of restricted stock units with share options.
For the private equity and asset management industry, further details are expected on
9 December which will help clarify the future tax treatment of carried interest. The growth
in salary sacrifice remains a concern to Government and it will collect evidence to inform its
approach. The Chancellor announced that he will release
the outcome of the current consultation on pensions tax relief in Budget 2016. This currently
costs the Government somewhere between 30-50bn per year and hence remains a tempting target
for the Chancellor – so the respite for employers and employees here is likely to only be temporary.