View our summary of the 2015 Autumn Statement

Chancellor George Osborne delivered his joint Autumn Statement and Spending Review yesterday.

Some of the key measures announced include the reversal of cuts to tax credits, the introduction of a new 3% stamp duty surcharge for buy-to-let properties and second homes, and an extension of the doubling of small business rate relief.

autumn statement

Additionally, plans to provide devolving powers to Scotland, Wales and Northern Ireland, and a commitment to further investment in transport and infrastructure were also revealed.

Click here to view our detailed summary of the key announcements contained in the Autumn Statement and Spending Review.

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Chancellor to present Autumn Statement and Spending Review today

Chancellor George Osborne will present his Autumn Statement today, his most important House of Commons speech after the March Budget, in which the Government sets out its plans for tax and the economy.

For the first time, the Treasury will be combining the Autumn Statement with an announcement of the results of the annual Spending Review, which specifies the details of Government departmental spending.

There will be a single speech and document covering both fiscal events, with the speech taking place at 12.30pm and the document likely to be available on the gov.uk website shortly afterwards.

autumn statement

Speculation surrounding what will be announced within the Statement is rife: the Chancellor is expected to address the issue of tax credit reforms as a result of the recent defeat in the House of Lords, along with potential caps on charges for cashing in pensions early, and new plans for the expansion of the city devolution deals scheme.

Additionally, it is expected that the Chancellor will announce that house building is to be made a top priority: £7 billion is predicted to be pledged to build more than 400,000 ‘affordable homes’.

Keep an eye on our website – we’ll be bringing you the main headlines from the Autumn Statement and Spending Review throughout the afternoon, with a full detailed summary of the key points published later tonight, ready for you to read tomorrow morning.

Workplace pensions ‘could be postponed for millions’ amid concerns over small business implementation

A report from the National Audit Office (NAO) has revealed that the Government has drafted contingency plans for placing a last-resort ‘emergency pause’ on the pensions auto-enrolment scheme, as fears arise over the disorder that the legislation could bring for smaller employers.

Government ministers will make use of the emergency pause option if auto-enrolment proves to be too difficult for small businesses to implement, or if the programme results in increases in demand with which it is unable to cope.

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The option of an auto-enrolment pause has been introduced as a result of concerns that employers may struggle to deal with both the forthcoming changes to the National Minimum Wage and the new pensions measures.

The Government harbours additional concerns over pension providers’ abilities to cope with the volume of employees that must be enrolled under the new scheme.

The report stated: ‘The Department for Work and Pensions is now rolling out automatic enrolment to small employers, who pose new challenges for the programme.

‘The profile of employers affected by automatic enrolment is now changing dramatically.’

Experts have reported that there is a ‘high risk’ of respite having to be offered by 2018.

Autumn Statement: Business group urges Chancellor to cut tax admin costs

As the 2015 Autumn Statement approaches, the British Chambers of Commerce (BCC) has urged Chancellor George Osborne to cut tax administration costs, as part of the Government’s drive to reduce red tape by £10 billion by the end of this Parliament.

In a letter to cabinet ministers, the BCC has outlined a number of recommendations for reducing the cost of tax administration, which it believes is having an adverse effect on UK businesses.

autumn statement

The business organisation suggests reducing the number of changes to business tax rules, by making such changes subject to the scrutiny of the Regulatory Policy Committee, and by including tax administration measures in the Government’s ‘one in, two out’ rule covering other forms of regulation.

In addition, the BCC is calling for HM Revenue and Customs to be subject to a Growth Duty and regular reporting, in line with economic regulators in the UK.

The business group also wants to see investment in HMRC support for business users, equal to the amount being spent on improving enforcement.

Dr Adam Marshall of the BCC commented: ‘Ministers need to put a brake on the number of changes to tax administration and compliance rules, much as they have done with other forms of regulation in recent years.

‘HMRC is under a lot of scrutiny from business and individual taxpayers at the moment, and rightly so. By taking steps to reduce the number and frequency of changes to tax rules, the Government would at a stroke make a big improvement to the prospects for business.’

The Chancellor will present the Autumn Statement and Spending Review to the House of Commons on Wednesday 25 November.

We can help with all of your tax compliance requirements – please contact us for further assistance.

Young likely to be poorer than parents ‘at every stage in life’, claims IFS

A new report by the Institute for Fiscal Studies (IFS) claims that young people are on course to be less wealthy than their parents throughout their lives, largely due to increasing pension values for older generations.

The IFS report examined the evolution in household wealth between 2006 to 2008 and 2010 to 2012 and discovered that young people today are more ‘financially insecure’ than previous generations.

It found that UK households actually grew wealthier between 2006 and 2012 despite the financial crisis, but said that the reason for this was the increase in pension values over the period.

money

Households aged between 45 and 54 saw the biggest increases in their pension wealth in the period, rising on average by £38,000. However, the slow rate of growth in overall wealth suggested that young people would lag behind earlier generations at every stage.

Dave Innes, a research economist at the IFS and an author of the report, said: ‘Despite the financial crisis, household wealth on average increased in real terms over the late 2000s, driven by increases in private pension entitlements.’

But he added: ‘Even with these increases in average wealth, working-age households are at risk of being less wealthy at each age than those born a decade earlier.’

The study also found that many people still have inadequate savings for retirement. 30% of individuals reported saving for an unexpected expense, 23% reported saving for holidays or leisure and 15% for planned expenses, but only 10% of respondents claimed to be saving to provide a retirement income.

In addition, one third of households aged 25 to 34 expected the state pension to be their largest source of income after retirement, yet 24% did not expect to receive any income from the state pension at all.

Meanwhile, some 44% of all respondents did not anticipate receiving any income from a private pension at the end of their working lives.

Rowena Crawford, a senior research economist at the IFS, said: ‘It is striking how many individuals do not expect private pensions to have a role in financing their retirement, let alone be their main source of income. It will be interesting to see how these attitudes change as auto-enrolment into workplace pensions is rolled out.’

Boost in UK workers’ pay marks most substantial rise since financial crisis

UK workers have received an effective pay rise of nearly 2% over the past year, as low levels of inflation helped to boost take-home pay, the latest figures suggest.

The rise marks the most significant increase in pay margins since the 2008 recession.

The Office for National Statistics (ONS) has published the provisional results of its Annual Survey of Hours and Earnings (ASHE), revealing that average weekly earnings rose by 1.8% in the year to April, increasing to a figure of 1.9% following adjustment for inflation.

economy

The ASHE measures the level of earnings and the amount of hours worked across every economic sector.

Full-time employees’ median gross annual income has risen to £27,600, a 1.6% increase compared to the previous year, due to the positive wage figures.

Within the previous six years, average inflation-adjusted earnings have fallen.

However, analysts report that the increase in pay does not meet the 3.5%-4% level that is required by the Bank of England, in order for the Bank to consider raising interest rates.

Inflation remains negative while NS&I savings rates fall

The latest monthly report by the Office for National Statistics (ONS) has revealed that the UK’s Consumer Prices Index (CPI) inflation rate remained negative in October at -0.1%.

A rise in the price of clothing was more than offset by falls in food, alcohol and tobacco prices. Food and drink prices fell by 2.7% in October while energy costs were down 4.1%.

Consumer Index background concept

Fuel prices fell by 14% annually, and the October figures mark the first time the CPI has fallen on an annual basis for two months in a row since it was created some eighteen years ago.

It is the ninth consecutive month that inflation has been at or very close to zero.

Expectations of an imminent rise in interest rates are already very low, following the Bank of England’s announcement earlier this month that inflation was unlikely to hit its 2% target within the next two years, and the latest ONS figures will do nothing to raise those expectations.

Meanwhile, savers in Government-backed ISAs have seen their interest rates cut, further reducing the value of tax-free savings.

On Monday the NS&I reduced the annual interest rate on its Direct ISA from 1.5% to 1.25%. The cut will affect over 400,000 investors in what was, until recently, one of the most generous ISAs on the market.