Autumn Statement 2016 summary
- The Office for Budget Responsibility (OBR) upgraded the growth forecast for 2016 to 2.1% but downgraded the forecast for 2017 to 1.4% with comment that forecasts are more unpredictable than usual due to Brexit negotiations.
- The government will no longer seek to deliver a budget surplus in 2019-20 rather it will be as soon as possible in the next Parliament.
- Borrowing will be £68.2billion this year, falling gradually over the next 5 years to a projected 17.2billion in 2021-22.
- Jobs growth has been strong across the country, with employment standing at a record high of 74.5% in the 3 months to September 2016.
- A new National Productivity and Investment Fund will receive £23billion to invest in infrastructure and innovation to help drive growth, together with affordable housing and measures to improve productivity which lags significantly behind the US and Germany as well some other European countries.
Taxation & Pay
- Personal annual allowance to increase to £11,500 from April 2017 as planned and to £12,500 by the end of Parliament in 2020.
- Higher rate tax threshold to increase to £50,000 by the end of Parliament.
- Corporation tax to be cut to 17% by 2020 as outlined in the Budget earlier in the year.
- Salary sacrifice tax advantages to be phased out in most circumstances.
- Insurance premium tax to increase from 10% to 12% from June 2017.
- Employee and employer National Insurance thresholds to be aligned from April 2017.
- National Living Wage to increase from £7.20 to £7.50 per hour from April 2017.
- A new National Savings Bond will be introduced in Spring 2017 paying approximately 2.2% per annum gross, with a maximum investment of £3,000 and a term of 3 years. Full details will be in the Spring Budget.
- Where a pension is in drawdown, the Money Purchase Annual Allowance will reduce from the current level of £10,000 to £4,000 from April 2017.
- Fuel duty increase to be cancelled for the 7th consecutive year, saving an average car driver £130 per year.
- Government to legislate in 2017 against compensation culture for whiplash injuries which will save on average £40 per car insurance.
- Lettings agent fees to tenants are to be abolished as soon as possible.
- A consultation is to be launched on banning cold calling regarding pensions and other pension scams.
- The Autumn Statement is to be replaced by an Autumn Budget from 2017, with the Spring Budget being replaced with a Spring Statement from April 2018 responding to the OBR forecast but with no fiscal policy changes unless the economy dictates.
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