Phillip Hammond, the Chancellor of the Exchequer, announced his first Autumn Statement on 23 November 2016. According to the announcement, there are number of changes in the different sectors.
In this post, we cover the highlights of Autumn Statement 2016.
Government spending
Departmental spending plans set out in 2015 Spending Review to remain in place.
Public spending will be down to 40 percent from 45 percent of GDP in 2010.
The government also has set new fiscal targets planning for 2% underlying deficit and debt falling by 2020. In addition, they will meet commitments to look after budgets for key public services, defence, overseas aid and the pension “triple lock” until the end of this Parliament.
VAT
From April 2017, a new 16.5% rate on the VAT flat rate scheme will be introduced for businesses with limited cost (limited cost traders).
Income tax
The income tax threshold will be increased from £11,000 to £11,500 in April 2017. Higher rate income tax threshold is also set to rise to £50,000 by the end of the Parliament. Also, from 1 June 2017, the insurance premium tax rate is set to change from 10% to 12%.
Insurance
The employee’s and employer’s National Insurance thresholds will be equalised so they will need to pay contributions on earnings above £157 per week from April 2017.
Fuel duty
Fuel duty has been cancelled for the seventh successive year, saving average cab drivers £130 a year and van driver £350 a year.
National Living Wage
From April 2017, the National Living Wage for age 25 and over will increase to £7.50 from £7.20. This means there will be increase of £1,400 per year for a full time worker previously on the National Minimum Wage.
The National Minimum Wage Current rate New rate
21 to 24 year olds £6.95 per hour £7.05 per hour
18 to 20 year olds £5.55 per hour £5.60 per hour
16 to 17 year olds £4.00 per hour £4.05 per hour
Apprentices £3.40 per hour £3.50 per hour
Letting agency fees
Letting agency fees will be banned by the government so tenants will no longer have to pay such fees charged by the letting agents.
