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 manufacturing 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 addition the Chancellor announced the following pay and welfare measures:
- National Living Wage to rise from £7.20 an hour to £7.50 from April 2017
- Universal Credit taper rate to be cut from 65% to 63% from April 2017.
In the March Budget the government announced various proposals, many of which have been subject to consultation with interested parties. Draft legislation relating to many of these areas will be published on 5 December and some of the details may change as a result.
- Fuel duty frozen at 57.95p per litre of fuel sold
- £390m to be invested in low-emission vehicles
- Money invested in low emission vehicles will free up money for more EV chargers
- 100% of first-year capital allowance on the installation of EV charging
- £1.1bn to be invested in local transport networks in England
- Further £220m to address local traffic pinch points
- £1bn to be invested in digital architecture with the objective of making UK a market leader in 5G connectivity
- Insurance premium tax will rise from 10% to 12%
Investment in the manufacturing sector
Chris Hill, Partner at Hawsons, commented: “In this years Autumn Statement, the Chancellor spent much of the time reviewing spending and budgeting deficits. He discussed where government spending would or wouldn’t be. Next year, larger manufacturers face various challenges post-Brexit with ever changing exchange rates and with the new Apprenticeship Levy which comes into force from April 2017.”
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