The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
CIPP summary of Autumn Statement 2016
23 November 2016
In his Autumn Statement delivery, the Chancellor of the Exchequer, Philip Hammond said in his somewhat reassuring voice, that the UK is forecast to be the fastest growing country in the G7 in 2016. But he also told us that the UK is likely to face a period of uncertainty, followed by adjustment so we need to prepare our economy to be resilient - all said whilst avoiding any detail of EU negotiations which are going to cost the public purse in the region of £412 million. To follow was the news that this parliament’s aim was no longer to deliver a budget surplus by 2020, but the books will be balanced as early as possible in the next parliament. It was also confirmed that Britain remains the number one place to do business and the government will stick to the business tax road map as set out in the Budget earlier this year. Mr Hammond graciously paid tribute to his predecessor and managed all expectations at the outset by confirming that “no rabbits would be pulled from hats” under his watch, which gave us a warning shot across the bow that news about Salary Sacrifice might not be all we would hope for… or would it? The cheers of joy at the news that the Autumn Statement of 2016 would not only be the first from Mr Hammond, but also his last in its current format soon turned to jeers of derision as the news that a Spring Statement would be taking its place along with the introduction of an Autumn Budget. As the brief excitement subsides this leaves us to consider not what was included in this ‘final’ Autumn Statement - but what wasn’t included. For instance there was no mention during, or after the statement about Mandatory Reporting of the Gender Pay Gap (for both the private sector and the public sector). This is something that the profession has been keenly watching out for as many details are still to be confirmed. Whilst there were no real surprises for payroll in this Autumn Statement, there were still a fair few details to absorb and as we know from past experience, more will follow in the coming days and weeks. So in the meantime, welcome to the brief (ish) CIPP summary of the 2016 Autumn Statement. The CIPP policy team has also produced a Autumn Statement 2016 webcast so listen in if you want to know the key announcements or would like to share a summary with your payroll teams. The webcast is only 21 minutes long and can be a time saving medium to impart information to several people.
Tax rates and thresholds
Income tax
Income tax rates, bands and allowances for tax year 2017-18 are unchanged from the figures announced at Budget 2016. So the Personal Allowance will rise by £500 to £11,500 and the threshold for paying tax at the higher rate will increase to £45,000.
The Married Couple’s Allowance income limit increases by £300 to £28,000 and the Marriage Allowance (Transferable Tax Allowance) increases by £50 to £1,150. The Blind Person’s Allowance increases by £30 to £2,320.
UK income tax rates remain at 20%, 40% and 45%. (The Scottish Rate of Income Tax for 2017-18 will be announced by the Scottish Government separately.) The Government reiterated its commitment for the Personal Allowance and higher rate threshold to reach £12,500 and £50,000, respectively, by the end of the current Parliament.
Once the personal allowance reaches £12,500, it will then rise in line with CPI as the higher rate threshold does, rather than in line with the National Minimum Wage.
National Insurance
National Insurance thresholds
After a year when all but one of the National Insurance limits and thresholds remained unchanged, all figures change from April 2017. The Lower Earnings Limit (LEL) increases from £112 to £113, the Primary Threshold (PT) and Secondary Threshold (ST) are aligned once more, increasing from £155/£156 to £157, and the Upper Earnings Limit (UEL) increases from £827 to £866 (these are all weekly figures). The Upper Secondary Threshold for Under 21s (UST) and the Apprentice Upper Secondary Threshold (AUST) also increase to £866.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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