Autumn Statement 2016: Industry Highlights

Here’s a useful at-a-glance breakdown of the industry highlights of the Autumn Statement 2016.

Infrastructure

• National Productivity Investment Fund (NPIF) to provide £23 billion of additional spending, ensuring the UK’s economy is fit for the future.
• National Productivity Investment Fund will provide major additional spending in areas that are key to boosting productivity: transport, digital communications, research and development (R&D), and housing.
• An increase of over £800 million to the Scottish Government for infrastructure projects.
• An increase of over £400 million to the Welsh Government for infrastructure projects.
• An increase of over £250 million to the Northern Ireland Executive for infrastructure projects.

Housing

• £2.3 billion for a new Housing Infrastructure Fund for projects such as roads and water connections that will support the construction of up to 100,000 new homes in the areas where they are needed most.
• £1.4 billion to provide 40,000 new affordable homes, including some for shared ownership and some for affordable rent.
• £1.7 billion to speed up the construction of new homes on public sector land.

Transport

• £390 million investment in future transport technology including driverless cars, renewable fuels and energy efficient transport. This will include:

1. £100 million investment in testing infrastructure for driverless cars
2. £150 million to provide at least 550 new electric and hydrogen buses and to support taxis to become zero emission
3. £80 million to install more charge-points for ultra-low emission vehicles
4. A two-year 100% first year allowance for companies who install electric charge-points, coming into effect immediately‎. This allows companies to deduct the cost of the charge-point from their pre-tax profits in that year

• As part of the National Productivity Investment Fund, transport infrastructure will include:

1. £1.1 billion to reduce congestion and upgrade local roads and public transport
2. £220 million to tackle road safety and congestion on Highways England roads
3. £27 million to develop an expressway connecting Oxford and Cambridge
4. £450 million will also be spent on trialling railway digital signalling technology which will expand capacity and improve reliability

Exports

• Doubling UK Export Finance capacity.

Defence & Security

• Protecting the defence budget (no reduction in Budget 2016 pledge).
• Protecting the overseas aid budget (no reduction in Budget 2016 pledge).
• Over £102 million of LIBOR banking fines to support Armed Forces and Emergency Services charities and other related good causes: over the next 4 years support will go to more than 100 projects supporting Armed Forces personnel, their families and veterans; Emergency Service personnel; children’s hospitals, air ambulances and emergency responders; and museums and memorials.

Research & Development

• £2 billion more per year in research and development (R&D) funding by 2020-21.
• Increase in R&D funding for universities and businesses with R&D for areas like robotics, artificial intelligence and industrial biotechnology.

Oil & Gas

• Carbon Price Support capped until 2020.
• Business rates reduction package worth £6.7 billion.

Communications

• £1 billion to invest in full-fibre broadband and trialling 5G networks.
• Investment to support the private sector to roll out more full-fibre broadband by 2020-21.
• Funding will also support trials of 5G mobile communications.
• From April 2017, the Government will also provide a new 100% business rates relief for new full-fibre infrastructure for a 5-year period.

Culture / Tourism / Media

• Over £10 million to support culture and heritage projects across the UK:

7. £7.6 million will cover urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire
8. £850,000 for a Royal Society of the Arts pilot to promote cultural education in schools
9. £1.6 million to help complete Studio 144, an arts complex in Southampton, including an auditorium, studio, and gallery
10. £1 million towards the development of a new creative media centre in Plymouth

• New museums and galleries tax relief will be expanded to include permanent exhibitions, set at 20% for non-touring exhibitions and 25% for touring exhibitions. The relief will be capped at £500,000 of qualifying expenditure per exhibition.

Business Finance

• Protecting the budgets of key public services.
• Cutting Corporation Tax to 17% by 2020.
• £400 million pledged through the British Business Bank to invest in growing innovative firms:

1. The funds will be invested in innovative small businesses with potential for growth, to provide the finance that they need to expand
2. This will support up to £1 billion of new investment

• Rural Rate Relief will increase to 100% (available to businesses in areas with a population under 3000 that are the only village shop or post office with a rateable value of up to £8500, or the only public house or petrol station with a rateable value of up to £12,500).
• From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income (but pensions, pensions advice, childcare, Cycle to Work and ultra-low emission cars will be exempt).

Crackdown on Unethical Business Practices

• £4.3 million will be spent on helping small businesses to understand the rules and cracking down on employers who breach minimum wage rules.
• The Universal Credit taper will be reduced from 65% to 63% from April 2017.
• A ban on letting agents charging undue fees to renters.
• Cracking down on pensions scams.
• A new penalty is being introduced for those helping someone else to use a tax avoidance scheme. Tax avoiders are hit with significant bills when HMRC defeats their avoidance scheme; this new penalty will ensure that those who help them will also face the consequences.
• Tax avoiders will not be able to claim as a defence against penalties that relying on non-independent tax advice is taking reasonable care.

General Economy

• The Office for Budgetary Responsibility (OBR) now forecasts that in cash terms, borrowing is set to be £68.2 billion this year, falling to £59 billion in 2017-18, £46.5 billion in 2018-19, £21.9 billion in 2019-20, £20.7 billion in 2020-21 and finally £17.2 billion in 2021-22. The Government will no longer aim for a budget surplus (where more tax is raised than is spent) by 2019.
• Now aiming for 2% underlying deficit and debt falling by 2020.
• In 2017, fuel duty will remain frozen for the seventh successive year.
• Continuing the ‘triple lock’ on the state pension so that it rises every year by the highest of price inflation, earnings growth or 2.5%.
• A new 3-year NS&I Investment Bond available from spring 2017.
• The Personal Allowance to rise to £12,500 and the Higher Rate Threshold to £50,000 by 2020-21.
• The National Living Wage and the National Minimum Wage will increase from April 2017; for those aged 25 and over the National Living Wage will increase from £7.20 per hour to £7.50 per hour.
• Insurance Premium Tax (IPT) will increase from 10% to 12% from 1 June 2017. IPT is a tax on insurers and it is up to them whether and how to pass on costs to customers.

 

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