Autumn Statement 2016 : Predictions

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June 24th 2018
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Autumn Statement 2016 : Predictions

What to expect in tomorrow's 2016 Autumn Statement.

Chancellor Philip Hammond delivers his first Autumn Statement tomorrow afternoon with many challenges and changes to cater for including the 'Brexit', the new PM and the incoming US presidency of Donald Trump.

The OBR who oversee the government's taxation policies will reveal their latest statistics and forecasts for growth, unemployment and inflation tomorrow but it is already known that the outlook is not great. The government has already abandoned the previous chancellor's plan to balance the books by 2020 and the IFS has shown there will be a £25bn hole to plug by end of parliament due to the slowed growth and high inflation.

This bleaker outlook will cut projections for tax income therefore any changes Hammond wants to make may have to be made with borrowed money.

Indications at present show that the following are possibilities for tomorrow:

  • Extra funds will be acquired in order to fund infrastructure projects focused on roads, bridges and railways. £1.3 billion may be focused to tackle congestion on the roads. £5bn may be thrown at roads and railways.
  • Families with modest incomes may be helped with fuel duty freezes and reductions in costs of childcare.
  • Chancellor may bow to pressure to find money for NHS and social care.
  • Employers national insurance contributions may be reduced by either threshold changes or a rate cut.
  • Some reports state that a temporary cut in the rate of VAT may be used to boost spending and foster some growth.
  • The Conservative manifesto pledge for income tax cuts will likely be kept which means the tax free allowance will be raised to £12,500 and the higher rate threshold raised to £50,000.
  • Theresa May is sticking to the corporation tax cut to 17 percent by 2020 but has hinted at a recent CBI conference that if Donald Trump sticks to his pledges to cut the US tax rate to 15 percent then she will follow suit in order to give the UK the status of being the lowest corporation tax rate in the G20.
  • Cutting-edge businesses in science and technology will receive a £2bn investment to be used to provide new tax reliefs.
  • Rules for salary sacrifice are set to be tightened so expect more news on that in the statement.
  • £3bn housing fund to get 25,000 new homes built by the end of the decade with another £2bn loan to have another 15,000 new homes built.

The Autumn Statement will be delivered from 12:30pm tomorrow, November 23rd. Follow our updates to the Autumn Statement right here or by following our twitter @uktaxcalculator. All thoughts will be collated under the hashtag #AS2016.

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