Autumn Statement

The first and, as it turns out, only Autumn statement from our new Chancellor saw reduced growth projections, growing borrowing predictions, concerns over productivity and one or two announcements that will directly affect UK taxpayers. We have detailed below the main 15 points we picked up on:

  1. Personal Allowance & the Higher Rate threshold – both of these will increase as expected until we have a Personal Allowance of £12,500 and a Higher Rate threshold of £50,000
  1. Class 1 National Insurance – The rate at which an employee and an employer start to pay National Insurance on a wage will be the same moving forward at £157 per week
  1. Class 2 NIC – as expected Class 2 National Insurance will be abolished from 1 April 2018
  1. Corporation Tax –as expected the corporation tax rate will fall until it hits 17% in 2020
  1. Fuel Duty –will remain frozen
  1. Insurance Premium Tax – will increase from 10% to 12%
  1. Employee Expenses – a review has been announced which will look at the Tax Relief obtained by employees who claim work related expenses
  1. S.A – the annual limit will increase to £20,000 from 1 April 2017
  1. Tax on savings – the 0% tax band on your first £5,000 of interest will continue until 2017/18
  1. National Living Wage – will increase on 1 April 2017 to £7.50 from £7.20
  1. VAT Flat Rate VAT Scheme – a new rate of 16.5% will be introduced from 1 April 2017 for all business in the scheme that has limited costs
  1. Landlords/Tenants – Tenants can no longer be charged fees by the letting agent
  1. Small Income Allowances – 2 new income tax allowances have been introduced for individuals with trade or rental income below £1,000, where the individual does not have to disclose the income or pay the tax
  1. Salary Sacrifice – the Tax and National Insurance advantage obtained by using a Salary Sacrifice agreement will end, except for Pension Contributions, Childcare Costs, Ultra Low emission car contributions and the Cycle to Work Scheme.
  1. Benefits in Kind – a review has been announced which will look at the way Benefits in Kind are valued when calculating the Tax and National Insurance due.

Finally the most surprising announcement was the end of the Autumn Statement and that the Budget, normally held in spring, would be moved to autumn. This is to allow Parliament and others time to review the budget carefully before it becomes law, and means that we will have two budgets in 2017.

Although the above is very new and guidance is limited please do contact us on 01642 244 090 to discuss any concerns you have regarding the tax and national insurance implications of the Autumn Statement.