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Chancellor‘s Autumn statement. Key messages

30/11/2016 04:15 pm

UK‘s Chancellor Philip Hammond has delivered his first Autumn Statement – a country‘s economic forecast. In this Right Accounts blog post we list the key messages and also review points that are of importance to small business owners.

  • Income tax threshold will be raised from £11,000 to £11,500 in April 2017.
  • National Living Wage will be raised from £7.20 an hour to £7.50 in April 2017.
  • Higher rate income tax threshold will be raised to £50,000 by the end of the Parliament
  • Universal Credit taper rate will be cut from 65% to 63% in April 2017.
  • Employee and employer National Insurance thresholds will be equalised at £157 per week from April 2017.
  • Insurance Premium Tax will be raised from 10% to 12% in June 2017.
  • Tax savings on salary sacrifice and benefits in kind to be stopped, with exceptions for ultra-low emission cars, pensions, childcare and cycling.

Also, it was announced that the Parliament does not have any more plans for further welfare savings.

News for small business

The Autumn statement also had messages that are important to small business owners.

  • The commitment to drop Corporation tax from 20% to 17% by 2020 was reassured. The news were not met cheerfully by everyone as it was expected for the Corporate tax to be reduced even further, to 15%.
  • £23bn will go to National Productivity Investment fund which is aimed at backing the new infrastructure and innovation over the next 5 years. It will focus on transport, digital communications, research and development and housing.
  • The pledge was made to put £400m into venture capital funds through the British Business Bank. It is expected that it will help start-ups to scale-up rather than to be sold to bigger companies.
  • £13m will be provided to help businesses improve their management skills.
  • £4.3 million will be spent on fighting employers who are not paying the minimum wage and help small businesses to understand the rules.