Date Published: 28-11-2016

Just like the Budget in spring, the Chancellor’s Autumn Statement is always a nervous time for businesses and citizens alike, and possibly more so this year in the wake of Brexit.

Now that we’ve had time to think about it, what does the 2016 Autumn Statement mean?

Taxation, Pay & Benefits:

From April, the tax free allowance will be raised to £11,500 per year as well as the higher rate threshold being raised to £50,000.

A bold move by the government is yet again raising Living Wage to £7.50 an hour, a move that businesses have not favoured in the past as it means having to spend more on staff or, even worse, cut staff to stick to budgets.

The biggest shakeup, however, is that employee perks and benefits are set to cost more due to the government clamping down on Salary Sacrifice schemes. This move will mean that employees who buy their gym memberships or mobile phone contracts through the company they work for will no longer see the tax benefits – a move which could in effect make companies who offer such schemes currently, look less attractive.

The good news, however, is that schemes covering pensions, child care, ultra-low emission cars and the cycle to work scheme will be unaffected.

Transport & Infrastructure:

The good news for commuters is that the government are promising £23billion to be spent on infrastructure over the next five years which will also boost recruiting.

Key highlight include:

  • £1.1billion extra investment in English local transport networks
  • £220million to reduce traffic pinch points
  • £2billion per year by 2020 for R&D funding
  • More than £1bn for digital infrastructure

Conclusion:

Raising National Living Wage and Tax Thresholds will certainly aid workers, especially with the rising costs of imported goods due to the EU Referendum result, in the short term, but the Institute of Fiscal Studies claims that works will earn less in real wages in 2021 than they did in 2008.

The main positive outcome from the 2016 Autumn Statement is the investment into U.K. roads & transport which will not only boost the economy, making it easier for commuters and holidaymakers but it will also create thousands of jobs in order to create this infrastructure.

The government is also putting a big focus on technology and science by funding Research and Development, as well as innovation into self-driving vehicles which will create thousands more jobs in the I.T. & Technology Sector.

A New Format Going Forward:

The chancellor has also announced that this will be the final year of The Autumn Statement, with a full budget being held in the autumn from next year onwards, along with a Spring Statement from 2018.

What do you think of the Chancellor’s Autumn Statement and how will it affect you? Please let us know on LinkedIn, Twitter or Facebook.