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Philip Hammond delivered his Autumn Statement on Wednesday 23rd November 2016. His speech set out both tax and economic measures the government will implement.

In this article, we summarise the key points arising from the Autumn Statement and focus on what the changes may mean for the care sector.

In Summary (general):

  • The government reaffirming the objectives to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament.
  • Reduction of the Money Purchase Annual Allowance.
  • Confirmation of falling Corporation Tax rates to 17% from April 2020.
  • Review of ways to build on research and development tax relief.
  • Tax and National Insurance advantages of salary sacrifice schemes to be removed.
  • Anti-avoidance measures for the VAT Flat Rate Scheme.
  • Confirmation that future budgets will be in Autumn annually going forward.

 

In summary (care home specific):

 

  • National Living Wage to rise from £7.20 to £7.50 an hour from April 2017.
  • No extra funding for social care in England from national government.
  • No extra ring fenced funding for social care in England from local authorities.
  • No planned changes to VAT for the sector.

Autumn Statement Care Home Impact

Problems facing the care sector?


Scott Sanderson, Healthcare Partner at Hawsons, commented: “This year’s Autumn Statement was a chance for the new Chancellor to address the looming crisis in funding for the care sector, instead the focus was very much on devolution and housing at the expense of health and social care. The Chancellor, Philip Hammond, failed to deliver any significant funding proposals to help ease the problems currently facing the sector, with the care sector facing an uncertain future, leading to widespread criticism from senior figures.”

“The one thing he did speak about – the National Living Wage – is to rise from £7.20 to £7.50 per hour from April 2017, which wasn’t unexpected, but is a devastating blow to the care sector in the absence of any funding rises. This increase will see wages rise in a sector that already doesn’t have enough money to operate at peak efficiency and on the back of the National Minimum Wage rises in October 2016, this Autumn Statement was a chance to address these issues, but there was nothing from the Chancellor and instead, the statement was conspicuous for what it left out.”

Care England’s Chief Executive Martin Green, said: “The increases to the living wage, which do not appear to be funded by increases in social care funding, could lead to significant numbers of job losses. The Chancellor has absolutely ignored social care yet again, and he must be prepared for the impact this will have on families, local economies, and the NHS.”


For more information 

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You can also find all of our latest care sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Scott Sanderson began his career with Hawsons and trained as a Chartered Accountant, becoming a partner in 2015, specialising in the healthcare sector and small businesses. For more details and advice, please contact Scott on [email protected] or 0114 266 7141.

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