The Autumn Statement is the UK governments second biggest economic statement of the year and has significant implications for the populations finances.
Philip Hammond has described the statement as a plan to ensure the UK economy is ‘match-fit.
With the announcement of the UK’s choice to leave the EU, commonly referred to as ‘Brexit’, many were much more anxious for the statement this year.
So what does the statement mean for you?
‘Middle class perks’?
Employees will be able to five up some of their salary in exchange for goods and services. This will lower their income tax and national insurance bill due to their salary being effectively lower. The most popular use is for pensions, childcare vouchers and bicycles in the cycle to work scheme- all of which will remain unaffected, along with employees getting an ultra-low emission company car.
However, other items bought under the scheme such as computer, gym memberships and health screening will be subject to tax from April 2017.
A New Savings Account?
A new savings account is to be launched through National Savings and Investments, with an interest rate expected to be set at about 2.2%. At the moment, the equivalent account currently active pays interest of 1.62%. This will be available from spring 2017 for 12 months.
Insurance premiums to rise?
The cost of vehicle insurance may rise as the Insurance Premium Tax will rise fro 10% to 12% in June 2017. This could also affect home cover and other insurance products.
With the increasing difficulty to get a mortgage and buy a house, more people than ever are renting in the UK.
The chancellor acknowledged that home ownership ‘remains out of reach’ for many and committed to increase funding for home building.
The main working age benefits and tax credits were frozen in cash terms for four years from April 2016. This includes jobseekers allowance and income support.
The National Living Wage will rise from £7.20 to £7.50 in April for those aged 25 and over. This is a smaller rise than had been predicted earlier this year.
For more on tax and accounting follow our blog