Yesterday Chancellor Philip Hammond surprised MP’s by stating that this would be the last Autumn statement. The budget will now be in Autumn with a Spring statement. Hammond said his first Autumn Statement “is focused on preparing and supporting the economy as we begin writing a new chapter in our country’s history”.
Here is our overview of the main points we think may have an impact on you and your business:
Business:
- Doubling UK export funding capacity
- £400m into venture capital funds through the British Business Bank to unlock £1bn in finance for growing firms
- £400m for venture capital funds to unlock £1bn of finance for start-ups, to stop them being swallowed up by the big firms
- Funding initiative to boost management skills
- Committing to cutting corporation tax to 17% by 2020
Taxation & Pay:
- Income tax threshold to be raised to £11,500 in April, from the current £11,000
- Higher rate income tax threshold to rise to £50,000 by the end of the Parliament
- Tax savings on salary sacrifice and benefits in kind to be stopped, with exceptions for ultra-low emission cars, pensions, childcare and cycling
- National Living Wage to rise from £7.20 an hour to £7.50 from April next year
- Employee and employer National Insurance thresholds to be equalised at £157 per week from April 2017
- Insurance premium tax to rise from 10% to 12% next June
Public borrowing, deficit, spending:
- Government finances forecast to be £122bn worse off in the period until 2021 than was forecast in March’s Budget
- Debt will rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18
- Office for Budget Responsibility (OBR) forecasts borrowing of £68.2bn this year, then £59bn in 2017-18, £46.5bn in 2018-19, £21.9bn in 2019-20 and £20.7bn in 2020-21
- Public spending this year to be 40% of GDP – down from 45% in 2010
- Departmental spending plans set out in 2015 Spending Review to remain in place
Transport, infrastructure, regions:
- £1.1bn extra investment in English local transport networks
- £220m to reduce traffic pinch points
- £23bn to be spent on innovation and infrastructure over five years
- £2bn per year by 2020 for research and development funding
- More than £1bn for digital infrastructure and 100% business rates relief on new fibre infrastructure
- £1.8bn from Local Growth Fund to English regions
- Rural Rate Relief to be increased to 100%, “giving small businesses a tax break worth up to £2,900”
