Chancellor of the Exchequer Philip Hammond has presented his first autumn statement. It also seems to be his last autumn statement because next time round this will become the autumn budget. After that, the spring budget will turn into the spring statement. Either way, this is normally a pre-cursor for several hundred pages of complicated new revenue-raising tax legislation.
On the tax front, there were generally few surprises, as the measures for the most part had already been proposed.
Many individuals will welcome the confirmation of the increase in the personal allowance to £11,500 from next April. Together with the raising of the basic income tax rate band, that means it is possible to earn up to £45,000 annually from 2017/18 without being liable to higher-rate tax. The Chancellor promised to raise that threshold higher during the life of this parliament.
On savings, the amount that anyone can hold in an individual savings account (ISA) every tax year will increase from £15,240 to £20,000 from April 6 2017.
The government will also introduce, through NS&I, a new three-year investment bond offering an interest rate indicatively set at 2.2 per cent. Individuals aged 16 and over may invest between £100 and £3,000 in the new bond, which will be made available in spring 2017.
However, against the various bits of good news, there is a continuing trend for the government to capture more revenue in order to fund spending commitments and keep its debt manageable.
We are already aware of greater powers to combat tax avoidance and these are to be further strengthened.
The government has been keen to increase those situations where profit becomes subject to income tax rather than be subject to the more favourable capital gains tax rates.
As a consequence, HM Revenue and Customs can use recent tax-rule changes to scrutinise gains on sales of businesses and property more closely for the possible application of income or corporation tax.
On other fronts, but of less relevance to individuals, are proposals to restrict tax relief to larger companies for their finance costs and also impose limitations on the offset of past losses.
For further sources of revenue, situations where income and gains formerly fell outside UK tax jurisdiction are now being targeted under proposed changes.
Anyone who has previously benefited from non-UK domicile status for tax purposes over the long term may now find this tax advantage severely curtailed. From April 5, 2017, these individuals will be treated as domiciled for all tax purposes after they have been UK-resident for 15 of the past 20 tax years, bringing their worldwide income, gains and wealth within the scope of UK tax.
Additionally, individuals who were born in the UK and who have a UK domicile of origin will revert to their UK-domiciled status for tax purposes while resident in the UK.
It does seem, however, that accrued gains to April 2017 on non-UK assets currently in any overseas-based trusts established by a non-domiciliary and already in existence could stay outside the UK tax net.
The details should be clearer after a thorough review of the draft tax provisions published on December 5.
There is also the intention to extend corporation tax to the UK source income of non-resident companies.
This may not, of itself, be a revenue raiser, as that income is already subject to income tax.
However, it comes with the possibility that corporation tax may also be extended to the capital gains of those companies. Those gains are currently tax-exempt unless they arise on residential property.
Politicians are under sustained public pressure to improve infrastructure, maintain services and minimise austerity measures.
At the same time, there is a spotlight in the media on areas where there is a perception that insufficient tax is being paid. It is inevitable, therefore, that the government and HMRC will be increasingly required to find ways to help bolster the Treasury coffers.
Philip Spencer is a tax partner in BDO LLP, specialising in the real estate and construction sector philip.spencer@bdo.co.uk