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The Autumn Statement 2016 – New Measures

autumn-statement-2-new-measuresKey Points

The Autumn Statement 2016, delivered by Chancellor Phillip Hammond, communicated new forecasts from now until 2020/21. How will these new goals be achieved? What measures  will affect UK doctors, dentists, landlords and small businesses throughout the next few years?

OVERALL: Increasing productivity is essential

In order to meet the new economic objectives it is essential to increase productivity. Also, this is to catch up with the likes of the US, France and Germany, who’s productivity exceeds that of the UK.

The Chancellor has promised a £23billion investment fund to raise productivity through innovation and infrastructure over the next five years. This includes more science and technology research & development.

£390m will be spent on the future of transport technology, such as driverless cars, hydrogen buses and implementing more charging points for ultra-low emission vehicles.

PROPERTY: Making home ownership possible

This heading should probably be followed by “again”, as these measures are very much continued from the promises of the previous Chancellor.

Housing does still remain a huge issue in the UK, with home ownership out of reach for many still.

  • £2.3billion pledged for housing infrastructure, opening up for 100,000 new homes to be built
  • £1.4billion pledged to create 40,000 affordable homes
  • London will receive £3.15billion to deliver more than 90,000 new affordable homes
  • Relaxation of government grants to aid building
  • Revisit Right-to-By for housing association tenants
  • A pledge to double capital spending during their government
  • Fees for tenants will be scrapped

INFRASTRUCTURE: Aiming for world leader in 5G

It seems Mr Hammond is focused on grabbing the digital bull by it’s horn and has promised to invest £1billion in digital infrastructure in the UK. The objective is to be a world leader in 5G technology, improving speed and reliability of digital communications.

In addition, he will honour a five year plan to provide 100 percent business rates relief on new fibre infrastructure.

BUSINESS: What about help for UK businesses?

The Autumn Statement announcement included a few relevant incentives for businesses to step up to the next level:

  • £400m allocated for venture capital funds, with the potential to unlock £1billion funds for new business start-ups
  • Additional funding will be spent to boost management skills to increase those that lead the way in business entrepreneurship

Strengthening UK Businesses will be key to establishing an economy that works for everyone.

“My priority as chancellor is to ensure Britain remains the number one destination for business.” Mr Hammond

TAX: The all-important Tax implications

Tax is always a key area of interest for UK doctors, dentists, landlords and anyone in business.

Key points relating to tax changes:

  • Corporation tax will fall to 17 percent – the lowest rate in the G20
  • Insurance Premium Tax will increase to 12 percent next June, from 10 percent now. This is to raise revenue.
  • Further measures will be taken to clamp down on tax avoidance
  • Personal allowance will increase to £12,500 by 2020
  • The higher-rate tax threshold will increase to £50,000 by 2020
  • The allbeit complicated business rates package has been confirmed with a lower transitional relief cap
  • The tax breaks linked to Employee Shareholder Status will be scrapped

In addition, there will be another round of new tax measures over the forecast period, aimed to raise around £2billion extra.

Changes to employee benefits

Employee tax breaks will change from April 2017

  • Most Salary Sacrifice Schemes will be taxed the same as cash income
  • Some low-emmision cars, plus pensions, pensions advice, childcare and the cycle to work scheme will still offer some tax breaks for employees
  • Arrangements in place before April 2017 will be protected for up to one year
  • Arrangements in place before April 2017 for cars, accommodation and school fees will be protected for up to four years.

FINANCES: How new measures affect money matters

Fuel duty has been cancelled for the seventh year in a row. This saves motorists £130 per year.

There will be a new savings bond available next year, through NS&I. This will provide 2.2 percent interest over three years, with a maximum investment amount of £3,000. More will follow next year in the Budget.

More help is on the way for working families, as tax-free childcare will be initiated in 2017. This will be constantly monitored to ensure working families are benefiting.

Mr Hammond has also confirmed to keep the triple lock for pensioners.

What is the economic outlook and new key objectives for the UK economy?

Read more here.

Before you go…

Don’t forget to download our FREE Autumn Statement Summary Guide.


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