Autumn Statement 2016
An initial overview of the key announcements from today's Autumn Statement.
Traditionally, the Autumn Statement focuses on economic forecasts and spending plans. In his first appearance at the despatch box as Chancellor, Philip Hammond chose not to deviate from this well-trodden path.
The growth of the UK economy in 2016 looks set to be slightly above the earlier predictions of the Office of Budget Responsibility (OBR) but with lower growth and higher borrowing forecasted for 2017 and beyond, the Chancellor had little opportunity to pull the proverbial rabbit from the hat.
However, there were a few announcements that may affect personal finances:
- Confirmation that the Income Tax Personal Allowance will rise to £11,500 from April 2017; and a continuation of the plan for this to increase to £12,500 by the end of this Parliament.
- A commitment to increase the Higher Rate Tax threshold to £50,000 by the end of this Parliament.
- Insurance Premium Tax to increase from 10% to 12%, which may affect the cost of your motor and home insurance.
- Businesses will need to plan for the increase in the National Living Wage from £7.20 to £7.50 per hour from April 2017, and the alignment of the National Insurance thresholds.
- The scheduled Fuel Duty increase has been cancelled for the seventh successive year.
- The introduction, from next April, of a new NS&I savings Bond that will pay an indicative 2.2% gross on a deposit of £3,000.
- The costs associated with letting a property can no longer be passed onto prospective tenants, and agency fees will instead have to be paid by landlords – effective date “as soon as possible”.
One of the more significant announcements was that his first Autumn Statement, and Spring Budget, will also be his last. There will now be an Autumn Budget, starting in 2017, to announce tax changes well in advance of the start of the tax year, and a Spring Statement from 2018, to provide an update to the House in response to the OBR publishing their forecasts on the economy.
Overall, a rather quiet Autumn Statement from a private client tax perspective with little of substance that will be of interest to the majority of our clients.
Michael G Martin
Wealth Planning Director
Michael joined in 2016 as a Wealth Planning Director. Michael has a speciality in working with partners in law firms, accountancy firms and with private clients. Previously he has worked for Towry, RBS and Barclays Wealth. Michael holds the CII Diploma in Financial Planning (DipPFS). He has worked in the financial sector for 21 years, the last 17 in wealth planning.
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