A summary of the Autumn Statement

Budget 2016

The Chancellor Philip Hammond yesterday delivered his third budget, he began by saying; “This is a budget that shows the British people that the hard work is paying off.”

He went on to say; “As the UK prepares to leave the EU, the government is taking further steps to ensure a positive future by investing in public services, supporting businesses and boosting living standards across the country.”

Here are the main points:

Personal Tax:

  • Tax free personal allowance to rise from £11,850 to £12,500 in April 2019
  • Higher rate income tax threshold to rise to £50,000 in April 2019
  • The National Living Wage will increase from £7.83 to £8.21 per hour from April 2019

Business:

  • Corporation Tax will be cut to 17% by 2020
  • VAT threshold for small businesses to remain at £85,000 until 2022
  • A reminder that the Tax free dividend allowance was reduced from £5,000 to £2,000 in April 2018
  • £900m in business rates relief for small businesses
  • Business rates with a rateable value of £51,000 or less to be cut by a third over 2 years
  • £650m to rejuvenate high streets (though Chancellor stated “the change our high streets face is irreversible”)
  • Apprenticeship levy contributions by small firms to be reduced to 5%
  • Private Finance Initiative (PFI) contracts to be abolished
  • New Digital Services Tax to be introduced on UK revenues for tech giants from April 2020 (2%)
  • From the 1st April 2020, if you are surrendering R&D credits to get a cash refund there is a limit to the refund, which is 3 times the amount of PAYE and NIC liability for that year

Brexit:

  • Extra £500m for preparations for leaving the EU
  • A commemorative 50p coin to mark the UK’s departure from the EU
  • Spring Statement next March could be upgraded to full Budget if needed

Transport:

  • Opening the use of e-passport gates at airports to USA, Canada, New Zealand, Australia and Japan
  • Air passenger duty to be indexed in line with inflation
  • £420m to tackle potholes, bridge repairs and other minor works in this financial year

Housing:

  • Stamp Duty abolished for all first time buyers of shared ownership properties valued up to £500,000
  • New partnerships with housing associations in England to deliver 13,000 homes
  • £500m for the Housing Infrastructure Fund, enabling 650,000 homes to be built

Pensions and Savings:

  • The lifetime allowance for pension savings will increase in 2019-20, rising to £1,055,000
  • The band of savings income that is subject to the, 0% starting rate will be kept at its current level of £5,000 for 2019-20
  • The adult ISA annual subscription limit for 2019-20 will remain unchanged at £20,000.

Healthcare and NHS:

  • Extra £20.5bn for the NHS over next 5 years
  • £2bn extra per year for mental health services
  • Extra £700m for Councils for care for the elderly and disabled
  • £10m for air ambulances

If you have any questions on how the Autumn Budget will affect you get in touch or call 0161 249 5040