Leading City lawyers give their views on the Autumn Statement

Lawyers from leading City law firm, Carter Lemon Camerons LLP, have given their views on the chancellor’s Autumn Statement, which contained significant measures affecting housing and employment.

Rufus Ballaster, a Partner at City of London Law Firm Carter Lemon Camerons LLP and the Head of the firm’s Property Department, said: “The Autumn Statement has one big surprise – that it is the last such fiscal measure.  Having two budgets in 2017 then Autumn Budgets thereafter – with time to adjust before the start of the following tax year – is mature, sensible and welcome.”

For the property sector, the Autumn Statement contained a few significant items:

  1. Insurance Premium Tax up from 10% to 12% – another bit of stealth taxing as we have become accustomed to expect in recent years
  2. Over £3bn promised to build affordable housing in London (amid comments about how unaffordable ‘normal’ housing has become in the capital city)
  3. £2.3bn promised to build more housing in areas of high demand
  4. Ban on letting agents charging tenants fees (will we see a need for any prospective tenants to present themselves with some kind of financial passport check or are landlords supposed to take tenants without any background check – if landlords are due to pay for it, watch out for more unpalatable rent increases coming through!)
  5. The new penalties for those who avoid tax – is that aimed at SDLT so leading to a witch-hunt among past property investors to test what they paid when?

“As I expected”, Rufus continued, “this Autumn Statement did not have massive headlines as to rises in Property Taxation, which many previous have, as the sector is already so heavily burdened that it was best left alone.

“Having said that, opportunities were missed, for example to get CGT on residential property in line with other investments rather than penalising that class of investment over all others.”

Rufus also is concerned about the detail behind some of the comments and whether the positive spin any Chancellor should give while speaking publicly in this way will be delivered in practice.

“So like the rest of us, Philip Hammond wants ‘a housing market that works for everyone’ and yet it is hard not to think how most of these announcements ring bells; similar announcements have been made time and time again but today we hear dire statements about lack of housing stock,” he said, “why is today’s news going to make a difference previous efforts have failed to achieve?”.

Rufus concluded: “Perhaps it is the planning system which remains the big block on matching supply to demand?”

Meanwhile, Kate Boguslawska, a Partner at Carter Lemon Camerons LLP who specialises in employment and commercial law, said: ‘Although at first sight, the budget seems to make some favourable changes  to employees by increasing National Living Wage from £7.20 to £7.50 from April 2016, this view is quickly  balanced by the changes introduced for benefits in kind. They will be withdrawn at a lower rate of 63p for every pound of net earnings.’

Kate added: “This change would not only affect employees who use salary sacrifice in exchange of goods and services, but also employers.  For years employers were encouraged to introduce payment options that would be attractive to their employees, therefore including health screening and gym membership, these incentives will now be less attractive.

“Fortunately employers supporting young families and women returning to work after maternity leave will not be affected as childcare vouchers are not caught by the changes.”