A summary of the Autumn Statement

In this years Autumn Statement, billed as a spending review, George Osborne intends for Britain to become “The most prosperous country of all the major nations of the world.” Declaring that the government’s job is no longer to rescue Britain but to rebuild Britain.

Major opposition to cuts in tax credits and the police budget seem to have paid off as the previously announced cuts in tax credits have been abandoned and there are to be no cuts to the police budget.

Although a considerable amount was announced in the Summer Budget, the Chancellor unveiled changes to suggest there will be more to follow in the future.

Here are the main points:

Business Taxation

  • Abolition of the uniform business rates, with local government keeping revenues, councils have ability to cut rates, mayors can raise rates if they support infrastructure
  • Reduction in corporation tax to 18% by 2019
  • For 600,000 small businesses, the rate relief scheme extended
  • £12bn from local growth fund will help in the creation or extension of 26 enterprise zones
  • Loans instead of grants for business R&D

Other support for smaller businesses that have previously been announced include:

  • From April 2016 the Employment Allowance will rise to £3,000, benefiting over 1 million employers, and helping many businesses take on their first employee
  • The cancellation of the planned September 2015 fuel duty increase means a small business with a van will have saved £1,357 by the end of 2015-16 compared to plans inherited by the government at the start of the last Parliament
  • The government will meet its commitment to 75,000 Start-Up Loans by the end of this Parliament

 
Personal Taxation

  • Osborne makes 100% U turn over tax credits, he has decided to scrap the plans altogether
  • Proposals to raise £5bn in a fresh crackdown on tax avoidance

 
Economy and Public Sector

  • £12bn welfare savings delivered “in full”
  • Breaking welfare cap to need MP’s approval
  • 1m jobs will be delivered in next five years according to OBR forecasts
  • £10.1bn surplus predicted for 2019/20 said George Osborne, as Britain comes “out of the red and into the black”
  • The NHS budget will rise from £101bn to £120bn by 2020-21, and £22bn of efficiency savings will be made across NHS
  • HMRC will make savings of 18%, already announced that many local offices will be shut and services digitised
  • Local authorities with responsibility for social care to be allowed to levy a new precept of up to 2% on council tax

 
Savings & Pensions

  • Next year the basic rate state pension will rise by £3.35 to £119.30 this is the largest rise in real terms for 15 years

 
Health and Education

  • A real terms increase for education funding – including early years and further and higher education
  • NHS to deliver £22bn efficiency savings in England and Department of Health to cut 25% from its Whitehall budget

  
Housing, Infrastructure, Transport & Culture

  • Plans to hand billions to private developers to build 400,000 new homes in England
  • Money for new road and rail projects, including the electrification of TransPennine, Midland Mainline and Great Western
  • Housing benefit for new social tenants to be capped at same level as private sector

 
For a more detailed analysis of all the proposals please click here for the full Autumn Statement document.
 
If you have any questions on how the Autumn Statement will affect you contact our 
Tax Team on 0161 249 5040