The Chancellor delivered his autumn statement to a lively house of commons today, 3rd December. Far from acknowledging that the economy had gone off track, the Chancellor asserted that whilst the reduction of the deficit was marginally less than forecast for this and next year, in subsequent years it would return to a surplus slightly larger than predicted in 2018/2019. Inflation will be 1.5% for this year, falling to 1.2% next year and 1.7% the year after.
Growth will rise to 3% for the current year 2014, 2.4% in 2015 and 2.2% in 2016. Unemployment is expected to fall from 6.2% in 2014 to 5.4% at the end of the forecasted period, 2018.
There were spending packages announced including:
- The £2,000 National Insurance Relief extended to carers
- Additional £2bn each year to go the NHS
- Additional £1.2bn to go to GPs funded by exchange rigging fines
- £45m package to encourage export trading with emerging economies, Africa, Asia and South America
- Loans for Post Graduate degree students of up to £10,000
Taxation changes announced including:
- An increase in the Personal Allowance 2015/2016 to £10,600 (original forecast at £10,500)
- An increase in the 40% Higher rate threshold for 2015/2016 to £42,385 (this figure includes the £10,600 Personal Allowance)
- Company National Insurance for young apprentices abolished
- ISA limit increase from 2015 to £15,250
- ISAs transferable to spouse on death
- Pension Fund death rate of 55% abolished
- On death before age 75 pension annuity transferable
- Stamp Duty Land Tax re-written to a graduated basis
|0 to £125,000||Nil|
|£125,001 to £250,000||2% on excess over £125,000|
|Plus 5% on excess over £250,000 up to £925,000|
|Plus 10% on excess over £925,000 up to £1.5 million|
|Plus 12% on excess over £1.5 million|
Changes effective from midnight on 3rd December 2014
- Fuel Duty Frozen
- V.A.T. for Hospice charities and Air Ambulances to be repaid
- Air Passenger duty for the under 12s abolished to be extended to the under 16s next year
- 25% Tax on profits diverted from UK operations by Multinationals
- Restrictions on losses brought forward by UK banks.
- Inheritance Tax exemption to be extended aid workers losing their lives dealing with humanity emergencies
- R & D relief for small and medium companies doubled to 230%
- Extra relief for Business rate
These are some of the more relevant points from the Chancellor’s statement. We are happy to discuss with you the implications of the various measures as they may affect you. However, no action should be taken on the basis of the information contained herein without further advice. Click here to read the full Autumn Statement.