Autumn Statement 2016 – a view

This year’s Autumn Statement appears to be fairly neutral.  It would have been better to have a much larger spend on infrastructure projects to boost the economy at this delicate stage in our post-Brexit vote world.

I think our Chancellor is just taking a more cautious approach and trying not to let the mountain of debt increase too much – it looks large enough already.

The problem is we need our tax take in the UK to increase, more jobs and better corporate revenues would help increase the tax take instead of stealth taxes (Insurance Premium Tax increases).

The good news from the Autumn Statement is that we don’t see too much change on the pension front.  We need a period of stability now and no further change to pension legislation would be useful for the next four parliaments!

The only slight change to pensions was the reduction in the pension contribution allowance from £10,000 per annum to £4,000 per annum once you have accessed your pension benefits flexibly.  Whilst this might be annoying for a few, I don’t think it’s significant.

Better news was that Salary Exchange (or sacrifice) remains in place for employer based pensions.  This is a benefit for employees in schemes run on this basis as we continue to save on some national insurance (it’s also a benefit for the employer).

The fact that we maintain the status quo on tax relief on pension contributions is also good news.  Please take the opportunity to fund your pensions now.

In addition, the tax-free cash withdrawn from pensions remains at a maximum of 25% of the fund value for the majority.  This is also extremely useful but the Chancellor can benefit from this tax-free cash being spent in the economy right now.

Overall, the Autumn Statement appeared reasonable; let’s hope we get a similar Budget in the spring with a little more of a focus on growth.  We need to grow the economy carefully and strategically, not simply taxing everybody.

For a more technical take on the Autumn Statement, please see our 2 previous blogs –

The personal effects of the Autumn Statement 2016

AND

A summary of the Autumn Statement 2016 for business owners

Steve Speed