Chancellor George Osborne has given his Autumn Statement outlining his plans and forecasts for the UK economy including changes to tax policy, cuts, and investment.
Personal Tax
- Stamp Duty overhaul – No duty for properties worth less than £125,000, and then on sliding scale of 2% on value between £125,000 and 250,000, 5% on value between £250,000 and £925,000, 10% on value between £925,000 and £1.5 million, and 12% on value above £1.5 million
- Income tax – Tax-free personal allowance raised to £10,600 and higher rate income tax threshold raised to £42,385
- ISAs can be inherited tax free
- People who die aged under 75 to be able to pass on annuities tax free
- Fuel duty remains frozen
Corporate Tax
- New ‘Google tax’ levied on 25% of profits multinational companies shift abroad to avoid taxation
- Banks to pay £4 billion more in tax over next five years
- Inflation-linked increase in business rates capped at 2% with the discount avaialble for shops, pubs and cafes increased to £1,500.
Personal savings and loans
- New ISA limit raised to £15,240
- Government-backed student loans of up to £10,000 to be made available for postgraduates
Devolution
- Welsh business rates to be devolved to Welsh government
- Plans for possibility of devolving Northern Irish corporation tax to Northern Ireland
Government cuts and efficiency savings
- Further £10 billion of Whitehall efficiency savings planned
- £5 billion sought from crackdown on tax evasion and avoidance
- Public service pension reform planned to save £1.3 billion per year
Government spending and investment
- NHS to get additional £2 billion every year for frontline services
- £1.2 billion investment in GP services
- £250 million investment in new advanced material science institute in Manchester with branches in Leeds, Sheffield and Liverpool
Forecasts
- Office for Budget Responsibility (OBR) forecast for 2014 GDP growth upgraded from 2.7% to 3% and 2015 forecast raised to 2.4%
- “Deficit is falling this year and every year” and is now cut in half. OBR forecasts borrowing to fall from £97.5 billion in 2013/14 to £91.3 billion in 2014/15. Budget surplus of £23bn predicted for 2019/20
- “Very substantial savings in public spending” required in coming years despite government spending £10 billion less than forecast this year
- OBR predicts wage growth above inflation for next five years
