Autumn Statement 2016

24 November 2016

Introduction

The first major economic statement since the EU referendum focused on measures to “prepare our economy to be resilient as we exit the EU”.
Unsurprisingly, the Office for Budget Responsibility (OBR) forecasts for growth have changed since the last figures were published in March. The prediction for 2016 is 2.1%, slightly higher than the 2% forecast in March 2016.

However, in 2017 growth is expected to slow to 1.4%, lower than the 2.2% predicted at the Budget in March.

Aside from economics, chancellor Philip Hammond’s first Autumn Statement was light on new announcements.

There was a focus on investment in infrastructure and innovation with money allocated for R&D, homebuilding and transport.

He also confirmed various measures announced at Budget 2016 including:

an £11,500 personal allowance from April 2017
corporation tax will fall to 17% by 2020.

The end of the Autumn Statement

The main surprise was that this was the final Autumn Statement.

From 2018 the Budget will move to the autumn. A statement responding to OBR forecasts will follow in the spring but the chancellor was keen to stress that it will not be a “major fiscal event”.

The following report summarises the announcements made by chancellor Philip Hammond during the 2016 Autumn Statement on 23 November 2016.

At a glance

Business

Corporation tax

Main rate to reduce to 17% by 2020.

Salary sacrifice

Schemes taxed at the same rate as cash income.

Infrastructure

Increased funding for housing, transport and R&D.

Personal

Personal allowance

Allowance to increase to £11,500 in April 2017.

National living wage

Increase to £7.50 an hour from April 2017.

National insurance

Employees and employers thresholds aligned.

Pensions

Money purchase annual allowance reduced to £4,000.

Savings bond

New NS&I savings bond to be launched.

Other

Fuel duty

Frozen for another year.

Broadband

£1 billion investment in full-fibre broadband and 5G.

Local Growth Fund

£1.8 billion for different regions.