Here is a brief overview of today’s Autumn Statement.
The new Chancellor, Phillip Hammond has now delivered his first Autumn Statement and has used it to align the UK’s budgetary statements for future years. In the future, the Government will have a Spring Statement reporting on the OBR data and the formal Budget will move from March to November. This change is designed to provide plenty of time for any changes to be made before the new tax year (where required). Although, he did reserve the right to make changes in the spring.
Away from the politics, the Chancellor’s message was confident but cautious on the impact of Brexit decision. Many of the announcements today clearly supported growth in the UK and build on a broader infrastructure with less reliance on London and the South East. Only time will tell whether this is a success or not.
Forecasts remained relatively flat between 1.4% and 2.1%, while job prospects and growth in jobs looked to continue on an upward trend. There were no major changes in Government policy or approach to saving and investing.
Tax has been raised to meet some of the new initiatives via alignment of National Insurance Contributions levels, the taxation of elements of Salary Sacrifice (pensions are unaffected), the use of “incorporation” to shield income and reducing the available relief for pension funding once an individual is in receipt of an income from their pension.
These include the Government continuing with its promise to follow through on avoidance and evasion, be it onshore or offshore. There was also some good news announced in relation to certain chargeable events – where a gain is created disproportionally to the actual investment and return made, an appeal process has been introduced to consider such cases. Such an event can happen where individuals make partial withdrawals from their investment as opposed to full encashment of policies.
Finally, as Financial Advisers, we welcomed the announcement to tackle the practice of cold calling on pensions.
If you have any questions regarding the Autumn Statement, please do not hesitate to contact your Adviser or the office on 0121 323 2070 and we will be very happy to help.