Autumn Budget 2017

J Finance Autumn Budget

Jonathan Bright, Managing Director of J Finance Ltd, highlights those elements of the budget most likely to affect individuals…

The Chancellor had little room for large giveaways and has signalled a wish to continue the move to get back to a ‘balanced budget’.

Whilst there are several positive signs for the economy, much is overshadowed by the growth forecast for 2017 being downgraded from 2% to 1.5% and further downgrading for the following 4 years. Read more on that here.

There are many reasons behind this reduction not least continued low productivity and the drag of Brexit uncertainty.

However, on the brighter side the annual rate of CPI inflation is forecast to fall from a peak of 3% towards 2% target later this year and another 600,000 people are forecast to be in work by 2022.

Housing & Property

Stamp duty is to be abolished immediately for first-time buyers purchasing properties worth up to £300,000. To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty.

This was left until the end of Philip Hammond’s speech as a highlight of the budget and is welcome help to all first-time buyers. Its positive affect may be much more from the feel-good factor than its actual financial value and is a part of the overall plan to improve the housing market at the lower end.

The announcement of £44bn in overall government support for housing to meet a target of building 300,000 new homes a year by the middle of the next decade include many measures, including the announcement of new garden towns in Aylesbury, Buckinghamshire; Taunton in Somerset and Harlow and Gilston in Essex and Hertfordshire, along with a further 14 garden villages. More on that here.

Councils have been given powers to charge 100% council tax premium on empty properties, compulsory purchase of land banked by developers for financial reasons, £1.1bn to unlock strategic sites and help to regenerate housing estates.

Closer to home, Oxfordshire has been promised a £215m package to build thousands of homes and support growth for the future generation. This will allow 100,000 new homes to be completed in the county by 2031.

Taxation

The Tax-free personal allowance on income tax is to rise to £11,850 in April 2018 and the Higher-rate tax threshold to increase to £46,350.

The increase to Tax Bands is as anticipated for basic rate tax payers, but is larger than expected for higher rate tax payers.

Vehicle excise duty for diesel cars that do not meet the latest standards are to rise by one band in April 2018 and the existing diesel supplement in company car tax to rise by 1%. This move may take some of the uncertainty away from those holding back from buying a new car which has been blamed by many in the motor trade for lower sales.

The normal increases in duty for wine beers and spirits have been frozen along with fuel duty indexation.

Pensions

Despite speculation ahead of the budget, there has been no sign of the anticipated hit for higher rate tax relief on pension contributions.

Business

Affecting business, the VAT threshold for small business is to remain at £85,000 for two years whilst rises in business rates are to be pegged to the CPI measure of inflation not the higher RPI. Learn more on that here.

There’s also no change to Corporation Tax which remains at 19% this year, reducing to 17% from April 2020.

There is to be £500m support for 5G mobile networks, full fibre broadband and artificial intelligence, along with £540m to support the growth of electric cars including crucially more charging points, whilst a further £2.3bn has been allocated for investment in research and development.

You can read the full Autumn Budget statement online here.

If you would like to discuss how the Autumn budget will affect you and your family or to discuss any of the above points in more detail, please contact Jonathan Bright directly on tel: 01635 246305 or by email at: jonathan@jfinance.co.uk.

 

Established in Berkshire in 2004, J Finance Ltd is one of the leading financial planning companies in the area. We serve clients across the South of England including Oxfordshire, Buckinghamshire and Hampshire. If you would like to discuss this subject or any other financial matter, without obligation, please contact us on 01635 521 300 or contact@jfinance.co.uk.