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The chancellor closed his speech with the revelation that the government would move to a single fiscal event in the autumn of each year with the intention of providing more stability for both businesses and individuals.
The effect is that the existing regime of a ‘Spring Budget’ and ‘Autumn Statement’ is flipped on its head but will allow tax rates and bands to be known in advance of their application. This can only have a positive impact for the tax payer and their advisor.
He added that he felt there was no need for major tax changes to be made twice in a year, instead there will be a Spring Budget in 2017 and Finance Bill together with an Autumn Budget later in 2017 followed by a Spring Statement. This enables the government to respond to the Office of Budget Responsibility’s (OBR) forecasts. The statement will also review wider economic and fiscal changes together with any launch consultations.
The first Spring Statement will be in the Spring of 2018, however, having two budgets in 2017 means it will be 2018 before the government’s intention of stability from one fiscal event can be met.
The government has announced it is taking action to promote fairness in the tax system; a level playing field.
The government will introduce a new penalty for anyone who has enabled another person or business to use a tax avoidance arrangement which is later defeated by HMRC. The detail will be published in draft legislation shortly.
When considering the application of penalties, for anyone using such arrangements, the government will no longer consider the defence ‘that a person has relied on non-independent advice’ as them having taken ‘reasonable care’.
In addition the government is investing further funds in HMRC to counter tax avoidance and enable cases to be taken forward to litigation.
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