Autumn Statement 2016
The Chancellor Phillip Hammond gave his first and last autumn Statement following the announcement that the autumn statement is to be replaced with and autumn budget from 2017 and a spring statement from 2018.
A number of initiatives where introduce to help boast home building, rural areas, transport & rail, digital infrastructure and local growth funds.
Although there was no real announcement the chancellor indicated that he will look at ways to capture more tax from the so called “gig economy” and also incorporation, the way individuals form a company to pay less tax, so watch this space in the upcoming budget.
Minimum Wage and the National Living Wage
The National Living Wage is to rise from £7.20 to £7.50 a pay rise worth over £500 to a full time worker. The minimum wage is also set out below:-
Aged 21 to 24 from £6.95 to £7.05
Aged 18 to 20 from £5.55 to £6.60
Aged 16 to 17 from £4.00 to £4.05
Apprentices £3.40 £3.50
Employee & employer national insurance thresholds are to be equalised at £157 per week from next April, this will increase costs to employers (businesses).
Allowances and Tax Bands
The personal allowance is set to rise to £11,500 from April 2017 with the target to raise this to £12,500 by the end of this Parliament. Along with this the higher rate threshold is set to rise to £45,000 from April 2017.
The government is sticking to its plans to cut corporation tax from 20% to 17%.
Salary Sacrifice Schemes
Salary sacrifice schemes previously meant that employees could exchange some of their salary for a non-cash benefit in kind. This had the advantage that the employer and employee made tax savings because the benefit is taxed less than salary and in some cases not taxed at all, so a tax rise for those with any elements that will no longer be included.
Pensions, pension’s advice, childcare, Cycle to Work and ultra-low emissions cars will be exempt.
Arrangements in place prior to April 2017 will be protected for up to a year. Certain arrangements will be protected for up to four years, including cars, accommodation and school fees.
Letting Agents Fees
Renters will no longer be hit with charges from letting agents as they will be unable to charge the tenant for example when they sign a new tenancy agreement.
National Savings and Investment
A new investment bond is to become available from spring 2017. With savers being hit by poor interest rates for a number of year the new bond is to offer an indicative rate of 2.2 per cent.
It will be available to those aged 16 or above and will allow the flexibility to put away between £100 and £3,000.
Insurance Premium Tax
Insurance premium tax is set to rise from June 2017 to 12 percent, the government say IPT is a tax on insurers and it is up to them if the costs are passed onto customers by it is likely premiums will rise.
This sees IPT increase from 6% to 12% since October 2015, just 20 months.
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