So there we are, George Osborne's fifth and final Autumn Statement of this parliament.
With an election in May this was always going to be a very politically driven speech. This combined with many spending announcements that were already made this week, we did wonder whether there was anything left for the Chancellor to say. He did however, as is normal, have time to include some jokes at the opposition’s expense.
Actually although there was a lack of anticipation, there were some interesting items raised and in case you have not had the chance to catch up with them, the key announcements included:
Economic and Spending Announcements
- UK growth forecast was revised upwards to 3% (2.7% in the March budget) for the forthcoming fiscal year, 2.4% (2.3%) next year, but then falls to 2.4% (2.6%) for 2016 and 2017 with 2.4% (2.5%) in 2018.
- The public deficit has been cut in half since 2010. However there is still a long way to go. It is estimated that by 2018 Britain will be back in a surplus position.
- Annual borrowing will be £91.3bn this year - up from £87bn in March's prediction. This does allow from some reclassification of how the Government prepares its accounts! This isn’t helped by falling tax receipts.
- Debt as a percentage of UK GDP is now expected to fall every year to 72.8% in 2019/20, which is still an astonishing amount.
- Greater assistance to be offered for businesses wishes to export abroad, with £45 million additional cash to help finance exports to emerging markets.
- More spending on the NHS, Roads and Flood defences with savings coming from lower interest payments on Government debt.
- For 2015/16 the basic personal allowance will rise to £10,600 (instead of initially thought £10,500) and the 40% tax bracket will also rise higher than expected, but only marginally!
- A new 'google tax' of 25% will be enforced to tax profits for multinationals who shift profits offshore - but we shall be interested to see how this is actually calculated!
- Research & Development tax credits increased to 230% to encourage more R&D
- Inheritance Tax exemptions for aid workers, after emergency workers benefited in March.
- No NIC for apprentices under 25 to encourage employers to take on young people.
- There will be further emphasis on tax avoidance, with the transfer of non-incorporated businesses to companies and umbrella companies on the agenda.
Other Announcements and Measures to be Introduced
- Fuel Duty frozen.
- IHT breaks for pensions and ISA's. 55% death tax on pension funds to be abolished.
- It will be cheaper to take your children on holiday with reduced Air Passenger Duty for under 12s.
- New tax credits for children’s TV production, usual for our media clients.
- A long awaited reform of the tax.
- This will now be graduated, in the same way as income tax. This will have rates ranging from 0% to 12% (12% on any values of over £1.5m). This should mean that 98% of people paying the tax will pay less! This will be effective from tonight.
More detail will inevitably emerge on these measures over the next few days or so. We will keep you updated on anything important arising from the press releases from HMRC. In the meantime, if you have any queries, please give Warren or one of the team a call.