Chancellor Philip Hammond released the first Autumn Statement, which will also be his last.
The Chancellor announced that after careful consideration with the prime minister, the speech had been abolished and that there will be just a single round of tax changes each year, stating: “No other major economy makes hundreds of tax changes twice a year and neither should we.”
There were a few key points in the statement that are directed towards tradesmen. Read on to find out how the statement could affect you.
The State of the Economy
By the end of the year, the economy is expected to grow by 2.1%. However, growth is only expected to increase by 1.4% in 2017 and only by 1.7% in 2018.
It was thought the rate of growth would be faster than the predicted forecasts. The OBR believes this is due to the EU referendum, as there’s still continued uncertainty – particularly with rising costs and slower consumer spending.
Now this may not seem like a good thing, but when compared to many other EU economies, Britain seems to have a higher growth rate. In fact, it appears that Britain may be growing faster than both France and Germany.
New measures aimed at cutting motor insurance costs were also announced by Hammond. He said there will be a crackdown on whiplash claims, which could save policyholders an average of £40 per year.
However, the savings may be offset due to an insurance premium tax (IPT) hike that was also announced by Hammond. IPT will rise from 10% to 12% from June 2017.
Fuel for thought
It’s likely if you drive a commercial vehicle that you’ll welcome plans for fuel duty to remain frozen for the seventh successive year. The government say this will save drivers £130 a year on average. The RAC notes this will save the average van driver £350 a year.
When the next general election occurs, the tax free personal allowance will rise. The rises will increase to £12,500 and the threshold rate will increase to £50,000. Rises will be in line with inflation when it goes over that £50,000 threshold.
Corporation tax will go down to 17%, which is in line with the existing plans of the government. Not only that, but the business rates reduction package will be implemented, which can help tradesmen who work from a business premise.
There may also be a crackdown on inappropriate use of the VAT rate scheme. However, the Chancellor didn’t explain in great detail what this would entail.
Thanks to new measures, tradesmen may receive a boost. The measures’ goals are to have more homes built.
The Chancellor announced a new housing infrastructure fund of £2.5 billion. It’s thought that this money will help build around 100,000 new homes in areas where there is a high demand.
He also announced that in an effort to build an additional 40,000 affordable homes, £1.4 billion will be set aside.
Are you a tradesman? What do you think of the statement? Feel free to leave us a comment and let us know.