How the autumn statement affects you
Every year, HM Treasury makes two financial statements to Parliament, to accompany the publication of its economic forecasts. One of these is the Budget, and the other is the Autumn Statement, which is essentially an update on the Government’s plans for the economy.
Last month, Chancellor George Osborne made his Autumn Statement and kept to his General Election refrain: the economy is getting better but there is more to do. Despite relatively good news for this year on growth and unemployment, the deficit is higher than expected, partly as a result of lower tax receipts.
So, how might this year's Autumn Statement affect you? Below we have listed some of the main headlines, and you can read the Statement in full here.
If you are…married with a joint ISA, widows and widowers will now be able to inherit ISAs tax free.
Previously, ISAs lost their tax free status on the death of the saver, even when the ISA was held jointly with their spouse. From 3 December 2014, a surviving spouse will inherit the tax free advantages of their partner, and from 6 April 2015, they will be able to invest as much into their own ISA as their spouse used to, in addition to their usual allowance. The Treasury estimates that 150,000 married ISA savers pass away each year, and so this has the potential to impact many widows and widowers throughout the UK.
If you are…..an ISA holder, a further increase in ISA allowance
On 1 July 2014 the ISA allowance for the 2014/15 tax year increased from £11,880 to £15,000. The Autumn Statement saw a further, but more modest, increase to £15,240 for next year.
If you are interested in finding out more information about ISAs and the products offered by Al Rayan Bank, please click here
If you are…..a home buyer, stamp duty will now be calculated on a sliding scale, according to the value of the property.
In future each rate will only apply to the part of the property price that falls within that band - like income tax. The new marginal rates are as follows:
- You pay no stamp duty on the first £125,000 paid
- The 2% on the portion up to £250,000
- The 5% up to £925,000
- Then 10% up to 1.5 million
- Then 12% on everything over that
The Treasury estimates that this will save money for 98% of home buyers in the UK.
If you are…a family holiday maker, air passenger duty for children to be abolished
From 1 May 2015, there will be no more air passenger duty (APD) charged for children under 12 travelling in economy, and in 2016 this will be extended to all children under 16. If you have already booked a holiday with children under 12 that takes place after 1 May 2015, you will receive a refund of the APD. Please contact your airline or travel agent for more information.
If you are….a business owner, no national insurance payments for apprentices under 21
From April 2016, an existing exemption from paying national insurance on apprentices under 21 will be extended to those aged 25 and under. It is estimated that this change will encourage 500,000 new apprenticeships to be created.
If you are a …driver, fuel duty frozen
Fuel duty has been frozen at its current rate, which is 58p per litre for petrol and diesel.