The weekend press and airwaves echoed the discussion of the Autumn Statement and predictions have been coming in thick and fast. Today there was news that the country’s public finances improved in October, with a fall in the monthly deficit to £4.8bn from £6.4bn in the same month in 2015. No doubt this will have cheered the Chancellor ahead of delivering his first Autumn Statement tomorrow, but last June’s referendum result is still casting a shadow over the country’s growth.
Increases in national insurance contributions, corporation tax and stamp duty on shares have helped to boost the Treasury, which is good news for the easing of austerity. But the country is still suffering from the effects of the Brexit vote, which is expected to result in the government missing its target of £55.5 bn by the year end by some £10bn.
Hemmed in on several sides, the Chancellor is therefore not expected to deliver too bold an Autumn Statement. We’ve joined the speculation as to what might be the top five takeaways from tomorrow’s set of announcements:
- An increase in the Annual Investment Allowance, possibly back to £500,000.
- New flexible government borrowing rule.
- New rules introduced for tax treatment of salary sacrifice (not pension-related).
- A deferral of one year of the launch of Making Tax Digital.
- Proposals for a new Class 4 NIC structure from 2018, when Class 2 ends.
There has also been talk of funding being made available for local authorities to trial faster broadband, and for road improvements and research and development.
The Treasury says the government is “committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows space to support the economy as needed.” Following a tumultuous year, this Autumn Statement is undoubtedly one of the most important fiscal policy announcements for a long time, so stay tuned…