We are now less than 10 days away from this year’s Autumn Statement and predictions about what to expect are beginning to surface. George Osborne’s speech is set to be an interesting one, following the drop in confidence after the post-election high and the recent opposition the Chancellor has faced.
Please be aware that this article is based on predictions and should not be considered fact; we will provide a full summary of the Autumn Statement once the Chancellor has completed his presentation.
Following the recent opposition Osborne faced from the House of Lords, it is likely he will revisit tax credits in an attempt to gather support for the scheme. The cuts, had they been approved, would have reduced spending on working tax credit and child tax credit by £4.4bn. David Cameron has thus far avoided answering questions on the tax credits, but the Chancellor has confirmed he will address the plans to ease the transitions to lower tax credits.
The move to hand more powers to local bodies is likely to feature. Devolution and the ‘Northern Powerhouse’ have become a key part of Osborne’s term as Chancellor. More announcements regarding which cities will be involved in the next wave of cities to receive devolved powers, as well as more details about the local councils being given more control of business rates. The details should also include information about the ‘metro mayor’, a pre-requisite of devolved power, and how this role will be implemented.
Diesel motorists are expected to take a further hit with the anticipated rise in fuel taxes. This comes in the wake of the Volkswagen scandal where emissions tests were rigged. The changes could include a 1p-2p rise on diesel duty and higher Vehicle Excise Duty. There are concerns that this will have a huge impact on diesel car and van prices.
Previous statements have seen George Osborne make a number of statements on housing policy. This Autumn Statement is likely to see more yet, including the repurposing of empty and outdated prison buildings and converting them into houses. Reading prison was the first to be announced for the plans and further details are expected to be announced on Wednesday 25th.
Pensions Tax Relief
Whilst details on pensions tax relief is anticipated by many, following the Chancellor’s announcement in the last Budget that he would consult on plans to tax pensions like ISAs, it is likely this will be held until the next Budget.
In other pension news, the new Universal State Pension will come into force next year. The government promised not to increase NIC contributions during the length of their Parliament, as part of the Tax Lock. However, it looks likely that with the Class 2 and 4 contributions timetabled to be abolished they will be increased to align with Class 1 amounts.
Tax Avoidance Crackdown
It is expected there will be information about ‘anti-avoidance’ legislation; the measures currently being discussed could save the Exchequer up to £400m. Within this, there could be plans to crackdown on the use of ‘personal services companies’ used to pay consultants. If this is approved, employees who work with a company for more than a month will be expected to be put onto the payroll and make employer national insurance contributions.
The first Comprehensive Spending Review since October 2010 is expected to be included in the Autumn Statement. This review will set the level of spending for the government from April 2015 onwards, and will show how Osborne intends to achieve the £10bn budget surplus by 2020. Additionally, the Office for Budget Responsibility (OBR) will provide its update on public finances and the likelihood of achieving the surplus.
Main Residence Tax Relief – Some clarification over the Main Residence Tax Relief will be expected with regards to dividend taxes and the impact it will have on trusts.
Business Rate Review – This was completed earlier this year and is due to be published before the Budget in 2016, so it is possible that this will be brought forward.
We will be sending a summary of the Autumn Statement in the coming weeks, but if you have any questions in the meantime, please do not hesitate to contact us.