Autumn Statement Summary

With continued uncertainty about the future of the UK economy following Brexit and the US presidential election results, the OBR is forecasting lower than anticipated growth. This means tax receipts will be lower and borrowing higher, and this was the challenge facing the new Chancellor, Phillip Hammond in his first autumn statement. Mr Hammond has therefore acknowledged the inevitable and abandoned the target of balancing the budget by 2020. Given the uncertainty his strategy appears to be to try to make the economy more resilient by encouraging house building and other infrastructure spending.

The other much heralded changes related to helping the ordinary working class by increasing the minimum wage to £7.50 per hour from April 2017 and changing Universal Credit rules so that the people keep more of their benefits as their work income rises. However these changes do not go far enough to reverse the benefit cuts made previously by George Osborne.

A summary of the major changes includes:

For Individuals –

  • Personal allowance to be increased to £11,500 from April 2017
  • Higher rate threshold to be increased to £45,000 from April 2017
  • Annual ISA allowance to be increased to £20,000 for 2017/18
  • Introduction of a new investment bond

For Employers –

  • The National Living Wage for employees over the age of 25 is to be increased to £7.50 from April 2017
  • Removal of tax & NI benefits of salary sacrifice schemes with the exception of pensions, childcare vouchers and cycle to work
  • From April 2018 termination payments in excess of £30,000 will also be subject to national insurance

For Business –

  • Commitment to cut corporation tax rate to 17% by 2020
  • Reform of trade loss relief