This afternoon, Philip Hammond presented the Autumn Statement, his first major task since taking over on role of Chancellor. Not only was this Hammond’s first Autumn Statement, it was also his last. The Autumn Statement is being abolished them in favour of moving the main Budget to the autumn instead.
Hammond stated earlier in the week: "Being a former businessman, I know how companies crave stability and certainty above virtually anything else". With this in mind, many were keen to see whether the measures introduced would provide Britain’s businesses with a boost.
Here are the key takeaways for business owners and what the new measures mean for you, and your employees.
- Hammond opened his speech by pledging to prioritise infrastructure as a way to reduce the ‘productivity gap’ which sees the UK lag behind nations such as Germany and the USA. This gap essentially means that it takes a German worker four days to make what a worker in the UK makes in five, equating to longer hours and lower pay for British workers. To tackle this, Hammond wants the UK to be a world-leader in 5G technology. In order to make this happen, more than £1bn will be invested in digital infrastructure, and from April there will be 100% business rates relief on investment in new fibre broadband.
- A scrapping of the planned 2p rise in fuel duty is welcome news for those who rely on their cars to get around or deliver items to their customers. The Chancellor estimates this will save the average van driver an annual £350, while the average car driver will be £130 a year better off.
- A crackdown on salary sacrifice benefits such as gym memberships and mobile phone contracts. Presently, workers can obtain these perks by foregoing part of their salaries, but this comes at a cost to the nation by way of lost income tax and National Insurance Contributions. Employees who now use these schemes will pay the same amount of tax as everybody else. Certain benefits such as childcare vouchers and the cycle to work scheme are exempt.
- Sticking to his belief that businesses value certainty, he pledges the government will stick to the business tax plans previously set out in the March budget. This will see corporation tax fall to 17% by 2020.
- The income tax allowance will be increased to £11,500 from April 2017, a move that will allow workers to take home more of the cash they earn.
- The National Living Wage will be subject to a 4% rise, when it increases by 30p an hour to £7.50 next April. This does not come as a huge surprise as regular increases are necessary in order for the Government to meet their pledge of having a £9 an hour National Living Wage by 2020.
- Employee and employer National Insurance thresholds are to be equalised at £157 per week from April 2017, at a maximum cost to business of £7.18 per employee per year. This will come at no cost to the employee.
- Rural Rate Relief is to be increased to 100% off business rates giving small businesses in rural locations a tax break worth up to £2900.