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Autumn Statement: Summary

 

Posted on 3 December 2014

The Chancellor has presented the Autumn Statement to Parliament and left the rabbit to be pulled out of the hat until the very end with the announcement of the Stamp Duty reforms. This will be a real benefit to home owners, reducing the costs of buying a property quite considerably.

 Here’s an overall summary of what was announced today:

 

Growth

  • The economy has grown faster than previously reported, up 8% over this Parliament. Business investment has risen by 27%
  • GDP growth forecasts for 2014 is upgraded from 2.4% a year ago, and 2.7% in March to 3%
  • The economy will then grow by 2.4% next year, 2.2% in 2016, 2.4% in 2017 and 2.3% in 2018 and 2019
  • Inflation will be 1.5% this year, 1.2% next, and 1.7% the year after

 

Jobs and education

  • The Office of Budget Responsibility says unemployment will fall to 5.4% next year
  • Wages will grow faster than inflation for the next five years
  • Loans of up to £10,000 for post-graduate degrees
  • National Insurance on young apprentices will be abolished

 

Borrowing

  • The deficit will fall from £97.5bn in 2013-14 to £91.3bn this year
  • It will then reduce to £75.9bn, £40.9bn, and £14.5bn in the three years after that
  • In 2018-19, we will have a £4bn surplus, and £23bn the year after that
  • This is a less than expected fall in borrowing in the next two years, but a bigger than expected fall in the four years after that (due to lower spending, not higher tax receipts)
  • The Government will publish a Charter for Budget Responsibility that will be voted on in the New Year
  • Corporation tax devolved to Northern Ireland, business rates will be devolved to Wales, income tax devolved to Scotland

 

Banks

  • Cut banks' profits that can be offset against losses during financial crisis by 50%, to raise £4bn over next five years
  • The £1.2bn of foreign exchange rigging fines will go to GP services
  • Libor fines will go to emergency services, Gurkhas, veterans with hearing problems

 

Health

  • Confirmed £2bn a year extra spending on NHS
  • Extending £2,000 employment allowance to carers

 

Travel

  • Fuel duty frozen again
  • Air passenger duty for children under 12 abolished from next year, and for children under 16 the year after

 

Energy

  • A sovereign wealth fund for shale gas tax receipts will be set up

 

And now our favourite bit… the taxes!

 

Personal taxes

  • Tax free allowance raised to £10,600 next year
  • Higher rate tax band raised to £42,385
  • When someone dies, their husband or wife will be able to inherit their ISA and pension tax free
  • The inheritance tax exemption will cover aid workers who lose their lives dealing with humanitarian emergencies

 

Corporate taxes

  • A 25% tax on profits from activity in the UK for companies that shift profits offshore will raise £1bn over the next five years
  • Business rates to be reviewed
  • Tax relief for small and medium-sized businesses doubled, and a £45m package of support for exporters
  • Tax credit for children's TV producers

 

Property

  • Stamp Duty reformed to become more progressive, introduces marginal tax rates. Changes come into force from tonight!
  • Up to £125,000 - no duty
  • Up to £250,000 – 2%
  • Up to £925,000 – 5%
  • Up to £1.5m – 10%
  • Above that – 12%
  • Stamp duty cut for 98% of homebuyers who pay it, you pay more if you buy anything above £937,000
  • Measures introduced to prevent Entrepreneurs Relief being available on the disposal of goodwill to a close company to which the seller is related

 

 

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