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It was his first major chance to help shape the direction of the economy over the coming years. The new Chancellor, Philip Hammond, delivered his first Autumn Statement on the 23 November 2016.
One of the most interesting changes was the announcement to switch to an Autumn Budget and a Spring Statement.
This change had been called for by many businesses as well as economy and tax experts. The UK had become the only major advanced economy to make significant budgetary changes twice a year. This means that the March 2017 Budget will be the last to be held during springtime. A second Budget will take place next year in Autumn 2017.
From 2018, there will be a Spring Statement. It is expected to be sharply reduced in scope and to move away from being a mini-Budget.
What This Means
This change will also mean that the Finance Bill will occur following the Autumn Budget. We expect Royal Assent before the start of the following tax year. This will mean that the majority of tax changes should be announced and legislated for in advance of the start of the next tax year.
In the detailed background papers that accompany the Autumn Statement we learnt of the government’s plans to amend some of the requirements for the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) as part of the Finance Bill 2017 measures.
These changes would:
- clarify the EIS and SEIS rules for share conversion rights, for shares issued on or after 5 December 2016;
- provide additional flexibility for follow-on investments made by VCTs in companies with certain group structures to align with EIS provisions, for investments made on or after 6 April 2017;
- introduce a power to enable VCT regulations in relation to certain shares for share exchanges to provide greater certainty to VCTs.
A New Focus
A new consultation will look at streamlining and prioritising the advance assurance service for the schemes. We also learned the government will not be introducing flexibility for replacement capital within the tax-advantaged venture capital schemes at this time but will continue to review this over the long term.
There are also plans to increase the amount that social enterprises can raise through Social Investment Tax Relief. It should also be noted that much of the tax reliefs are currently subject to the EU State Aid rules. As the march to Brexit continues we could see significant changes to schemes such as the SEIS and EIS over the coming years.
Keep in touch with us and join our mailing list so you are kept fully informed of the changes over the coming months and years.