The Autumn Budget from Chancellor of the Exchequer Philip Hammond contained few surprises, but details of some of the changes relevant to our clients are covered below. Government spending is set to pick up, boosted by a better-than-expected outlook for economic growth and Government borrowing. Nevertheless, with a Brexit deal still yet to be agreed, the Chancellor’s generally positive tone was tempered with a note of caution.
Personal tax, savings and investments
From April 2019, the personal allowance will increase from £11,850 to £12,500 and the higher rate threshold from £46,350 to £50,000.
The 2019/20 ISA annual subscription limit will remain unchanged at £20,000. The annual subscription limit for Junior ISAs for 2019/20 will be uprated in line with CPI to £4,368.
The pension annual allowance (£40,000) and money purchase annual allowance (£4,000) will remain the same, while the Lifetime Allowance will increase to £1,055,000, in line with CPI.
The Government reconfirmed its commitment to consult on the Pensions Dashboard, and they also published a white paper on boosting pensions for the self-employed. The long-awaited ban on pensions cold calling is expected in the Autumn of this year.
The Nil Rate Band (NRB) stays at £325,000 while the Residential Nil Rate Band (RNRB) increases from £125,000 to £150,000.
Inheritance tax receipts are forecast to rise from £5.2bn in 2017/18 to £6.9bn in 2023/24, an increase of 32.7%.
The UK economy is forecast to grow by 1.6% in 2019, compared with an earlier prediction of 1.3%. Growth is then predicted to ease to 1.4% in 2020 and 2021, rising to 1.5% in 2022 and 1.6% in 2023.
Forecast public sector net borrowing for the current fiscal year was cut to £25.5 billion. Borrowing is then predicted to rise to £31.8 billion in 2019-20 before falling to £26.7 billion in 2020/21 and then continuing to decline to £19.8 billion in 2023/24, representing its lowest level in more than 20 years. The UK’s national debt peaked at 85.2% of GDP in 2016/17 and is expected to fall to 83.7% in the current fiscal year, continuing its decline to reach 74.1% by 2023/24.
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Information is based on our understanding of current tax legislation and regulations, which are subject to change. We are not authorised to provide tax advice, but will take your tax position into consideration when providing financial advice, and aim to maximise tax efficiency where appropriate.
The area of taxation is not regulated by the Financial Conduct Authority (FCA).