As you probably already know, on the 25th November George Osborne presented the latest Autumn Statement and Spending Review. We all tuned in at the office to hear what plans the government had in store for the next few years and were relieved that there were no nasty surprises. As usual, we will talk our clients through any changes that will affect them, but here is our summary of the main changes in each key area.
Pensions/ Savings
State pensions will increase by at least £3.35 to £119.30 per week.
The ISA allowance is to remain frozen at £15,240 (and £4,080 for Junior ISA’s).
The Government will respond to the pension tax relief reform consultation, which occurred this summer, in the Budget next March.
Any money remaining in drawdown pensions after death will be exempt from paying inheritance tax.
The plans to increase the rate of auto-enrolment will be delayed by six-months to April 2018 and 2019.
Pension credit will no longer be available to those who leave the UK for longer than a month.
Tax
Tax credit thresholds are to remain unchanged from those announced in the Summer Budget.
The tax free dividend allowance has been updated to £5,000 and the tax band rates for values higher than this have also changed.
Local authorities can increase funding for social care if they wish to, by raising council tax by 2%.
Capital Gains Tax (CGT) payments on second properties from April 2019 will have a 30-day window from the date of disposal.
HMRC will have access to an extra £800 million to handle tax evasion cases.
Housing
The housing budget will double to £2 billion a year. The plan is to provide 400,000 new homes over the next four years.
Restriction criteria will be lifted on Help to Buy shared ownership schemes.
Londoners will be offered greater equity loans through the Help to Buy scheme, taking the property market of the capital into account.
Stamp duty rates will be 3% higher from April 2016 for second homes and buy to let properties.
20% discount will be offered to first-time buyers on Starter Homes- of which there will be 200,000 new builds by 2021.
Businesses
The rate of relief for small businesses will be drawn-out for an additional year, up to April 2017.
The new Apprenticeship Levy, which will commence in April 2017, has been secured at 0.5% of the company’s payroll, with £15,000 allowance to relieve small firms (i.e. those with bills less than £3 million).
Steel industries will be protected from paying environmental tariffs in order to help them keep operating.
Public Services
The NHS will receive an additional £10 billion each year within the next four years.
Funding for schools will be secured, with £23 billion to be spent on school buildings.
Transport funding will be doubled. This will be invested into transport in the capital, as well as aiding the electrification of train lines and the production of High Speed 2.
There will be no funding cuts for the Police.
Car insurance costs will reduce as a result of ‘compensation culture’ reforms, which will aim to reduce false claims from minor traffic accidents.
From 2020, local authorities may choose to invest income from shops and businesses in local services, including libraries and local transport.
For the North
A Northern Powerhouse investment fund worth £400million will assist the expansion of small businesses.
Oyster-style tickets will become available throughout the North of England.
Support will be given to the 2021 Rugby League World Cup bid, to ensure that matches can take place within the North. £1million will help towards the 2017 Hull City of Culture programme.
We will of course be monitoring these changes as they come into force and discussing anything with our clients that may affect them. If you have any questions in the meantime regarding the plans announced in the Autumn Statement, or anything else that we might be able to help you with, please don’t hesitate to get in touch.
