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Talking Point - Autumn Statement 2016

Talking Point - Autumn Statement 2016

In the first Autumn Statement since the results of Brexit, Chancellor Philip Hammond said the government "will build an economy that works for everyone" and prepare the UK to leave the EU.

Key announcements included:

Personal tax

From April 2017, salary sacrifice schemes will be scaled back.  However, some benefits exempt from the changes include ultra-low emission cars, pension savings, childcare vouchers and the cycle-to-work schemes.  Any affected arrangements that are already in place prior to April 2017 will be given some protection.

The Personal Allowance will increase from £11,000 to £11,500 in April 2017 and then again to £12,500 by the end of the current Parliament.  It will then increase automatically in line with inflation, each year. 

The income tax higher rate threshold will increase from £43,000 to £45,000 in April 2017, and to £50,000 by the end of the current Parliament. 

Pensions and savings

The government intends to reduce the Money Purchase Annual Allowance from £10,000 to £4,000 from April 2017.  Anyone wishing to contribute to a money purchase pension, once they have taken their benefits flexibly, will be restricted to the reduced amount.

The government will also consult on a number of measures to tackle pension scams, before the end of 2016.


From April 2017, a new government savings bond is to be introduced through National Savings and Investments (NS&I), with an interest rate of 2.2% over a three year term and a £3,000 limit.

Housing

Letting agents in England are to be banned from charging upfront fees to tenants.  The government will be consulting on this.

£2.3bn will be invested to build 100,000 homes in high demand areas.  In addition £1.4bn will be invested to deliver 40,000 affordable homes with a wider range of housing types being developed.  

Infrastructure

There will be an extra £1.1bn investment in English local transport networks, with an additional £220m investment to reduce traffic pinch points.

£1bn investment is being committed to improve fibre networks and support 5G trials.  There will be 100% business rate relief on new fibre infrastructure.

For individuals

Insurance Premium Tax will increase from 10% to 12% from June 2017.

The government plans to make changes to the law to crackdown on whiplash claims, potentially saving the consumer an average of £40 a year on their car insurance premiums.

The planned 2p fuel duty rise has been scrapped for the seventh successive year.

From April 2017, the employer and employee National Insurance threshold will be equalised at £157 a week, costing the employer a maximum of £7.18 per year, per employee.

The National Living Wage will rise from £7.20 to £7.50 from April 2017.

From September 2017, 30 hours of free childcare for three and four year olds will be rolled out.

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