On 23 November 2016, Chancellor of the Exchequer Philip Hammond delivered his Autumn Statement 2016 speech. At Alexander & Co, we have rounded up some of the key announcements to see how it will affect you financially.
How does the Autumn Statement affect your finances?
The August interest rate cut caused banks to slash rates. Now the chancellor has promised a new “market leading” savings bond from Premium Bonds issued National Savings & Investment. This is set to be introduced after the Spring statement to help those with little savings who have been affected most by the low-interest rates. The Government expects 2 million people to apply for the saving bond. With a gross interest of 2.2% over a 3-year term, savers can invest up to £3000.
The tax break on salary sacrifice schemes on employee’s benefits will be removed in April. Exempt from this, however, is the salary sacrifice on child care, pensions, cycle to work schemes and low – emission cars.
The Chancellor also said there would be a commitment to increase the personal income tax allowance to £12,500. The high rate income tax threshold will be £50,000 at the end of the parliament.
For the seventh consecutive year, planned fuel duty increases will be cancelled.
The National Living Wage will also rise from £7.20 per hour to £7.50 from April. As expected, the Universal Credit taper relief has also been cut, meaning that someone claiming Universal Credit will see that credit fall away at 63p for every extra £1 earned. This is down from the previous level of 65p.
A big announcement in the Autumn statement was the immediate ban on letting agent fees for millions of tenants in rented properties, relieving plenty of strain on those facing hefty annual charges. Mr Hammond said “Landlord appoint letting agents, landlords should pay their fees,”
This announcement has been praised by consumer groups who say over the past few years the fee has spiralled out of control. Hammond also announced that they would be building 40,000 new affordable homes from a £1,3 billion fund. There was also a £2.3 billion housing infrastructure fund with a plan to build 100,000 new homes in areas of high demand.
For owners of rapidly growing businesses, they will largely be happy with many of the announcements. Funding of £1 billion for infrastructure, a 100% business rate relief on new fibre infrastructure, £2 billion a year by 2020 for research and development funding and a £23 billion fund on innovation and infrastructure in the next five years.
To help British businesses, export finance will be doubled and £400 million will be pumped into venture capital firms via the British bank, which Mr Hammond hopes will reduce takeovers of tech start-ups by foreign buyers. There was also good news for small businesses in rural areas, who will receive tax reliefs up to £2,900.
For more advice on any of the above, make sure you contact our friendly team at Alexander & Co. Or simply give us a call on tel:0161 832 4841