The new Chancellor of the Exchequer, Philip Hammond, acknowledged ‘sharp challenges ahead’ for the economy as he presented his first major fiscal statement, exactly five months after the UK’s historic vote to leave the European Union. This is how the Autumn Statement 2016 looks to us.
The latest forecasts from the Office for Budget Responsibility confirmed an increase in borrowing, which is now forecast to reach £68.2bn this year. Economic growth is expected to slow over the next two years, initially rising marginally to 2.1% for 2016, but then reducing to 1.4% in 2017. Overall, the ‘Brexit effect’ is expected to impact on economic growth to the tune of 2.4%.
- Corporation tax rate will drop in 2020 to 17%
- British Business Bank will invest an additional £400m in Venture Capital funds
- A new VAT flat rate of 16.5% for businesses with limited costs.
- Personal tax allowance will rise to £12,500 in April 2020
- National Living Wage will increase in April 2017 to £7.50 per hour.
- An additional £1.4bn will be used to provide 40,000 new affordable homes
- Transport infrastructure investment of £1.1bn
For a more detailed look at the impact of the Autumn Statement, you can download our summary here.
As always, if you have any questions, please get in touch, we’d love to hear from you.