By Lyndsey Hall
With the General Election in less than six months, the upcoming Autumn Statement on December 3rd could be George Osborne’s last as Chancellor of the Exchequer.
Osborne announced the date of the statement in his regular Treasury questions in the House of Commons, back in September. He said: “The core purpose of the Treasury is to ensure the stability and prosperity of the economy. That is delivered by our long-term plan and I can tell the House the plan will be further expanded on at the Autumn Statement, which I will deliver on Wednesday 3rd December.”
Previously, Osborne has used the Autumn Statement as an opportunity to make announcements about energy, welfare and pensions. So, what will come out of this year’s statement?
Well, the Treasury sought public input on what should be included in December, requesting anyone with “original and innovative ideas” to submit them for consideration on the department’s website.
The Autumn Statement traditionally focuses on government spending, but this year the emphasis could be on tax:
- NIC Exemption for Apprenticeships – according to figures from Grant Thornton, 50% of businesses would be more likely to hire apprentices if they were NIC exempt. With the government’s current drive to get more apprentices taken on by employers, this could be a favourite for the statement.
- Export Tax Credit for Exploratory Costs – import and export are very important to the UK economy, and more businesses exporting to countries like China and India could help us reach the government’s target of doubling exports by 2020. Grant Thornton’s survey revealed that a third of businesses would consider exporting to emerging markets if the exploratory costs were eligible for export tax credit.
- Inheritance Tax Threshold Rise – David Cameron has suggested that the IHT threshold could be raised to £1m from next March. He said that soaring house prices in some areas have made the current allowance inadequate, and the Office for Budget Responsibility (OBR) warned that the number of estates attracting inheritance tax would double from one in twenty today to one in ten by 2018-19.
- Reduction of Higher Rate Tax – Cameron has said that there is no reason to wait for the UK economy to be “back in the black” before beginning to raise the threshold of higher rate tax, He also promised to raise the threshold from £41,865 to £50,000 by 2020.
The OBR has expressed concerns that the government will fail to hit its target for income tax, as a result of salary stagnation, the number of self-employed, and the number of low earners. Whilst unemployment has happily fallen to less than 2 million, it is actually more beneficial to the Treasury if wages rise rather than employment. This could mean that the minimum wage could be set to increase again, whilst the rising threshold for higher rate tax could encourage high earners to push for even bigger salaries without the risk of 40% tax.
What are your predictions for this year’s Autumn Statement? What would you like to see brought into effect before the General Election in May, and what would you prefer to fall by the wayside if and when the administration changes? We’d love to hear from you in the Comments or on Twitter @KnowlesWarwick.
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