How the autumn statement may affect you

Good Money 650

In late November the Chancellor of the Exchequer delivered a spending review and the first Autumn Statement of the current Conservative Government. The headline announcement was the cancellation of proposed cuts to tax credits, but that wasn’t the only news.

Below we have summarised 5 key areas that we think will be of interest to our customers:

Homes: The Government announced that it intends to stimulate a major house building programme. It will double the housing budget to £2billion and has pledged 400,000 new affordable homes by the end of the decade: 200,000 of which will be ‘starter’ homes for the under 40s.

To find out more about Al Rayan Bank’s range of Home Purchase Plan (HPPs), including the only Sharia compliant HPP to be backed by the Help to Buy: HPP guarantee scheme.

Buy to let: From April 2016 anyone buying a second home or buy to let property will pay a 3% surcharge on their stamp duty bill. Landlords are also facing a change to the way they pay tax when they sell their buy to let properties. At present capital gains tax isn’t due until the end of the tax year, but the Chancellor announced that from April 2019 landlords will have to pay their capital gains bill within 30 days of selling a property.

From 2017 the amount of home finance interest tax relief landlords can claim is changing too. Landlords will no longer be able to deduct home finance interest before calculating their tax bill and instead will get a tax credit equivalent to 20 per cent basic-rate tax on this amount.

Al Rayan Bank currently offers two Sharia compliant Buy To Let Purchase Plans (BTLPP) for customers with at least 75% or 65% finance to value (FTV).

Pensions : The state pension will rise by more than £3 to £119.30 a week from next April. Also, the full rate for people collecting the new state pension from April 2016 has been set at £155.65.

The state pension age is due to rise to 68 in the 2030s, and 69 in the 2040s. The ‘triple lock’, which helps to protect the value of the state pension be ensuring it rises in line with whichever is highest out of CPI inflation, RPI inflation or Bank rate, will be maintained.

Find out more about The Islamic Pension Trust (IPT), a workplace pension scheme for Muslims, accredited for Sharia compliance by Al Rayan Bank.

Business: For small business, the Chancellor abolished uniform business rates, meaning that 600,000 small businesses will enjoy business rate relief for another year. For large companies, with a wage bill of more than £3m, the Chancellor announced an apprenticeship levy to fund three million new places for apprentices.

Al Rayan Bank provides a whole range of Sharia-compliant products for businesses – including business savings, commercial property finance and workplace pensions

Savings: ISA limits remain unchanged at £15,240 following the Autumn Statement. However, from April 2016 ISAs are set to become more flexible with consumers able to redeposit withdrawals made from an ISA without affecting their annual ISA allowance. Also from April, all basic rate tax-payers will have a £1,000 allowance for savings income, before they have to start paying 20% savings tax. The allowance for higher-rate taxpayers is £500.

We will provide much more detailed information on how these changes may affect you in later editions of Good Money.

Find out more about Al Rayan Bank’s range of ethical, Sharia-compliant savings accounts – which regularly top the Best Buy tables in the UK. 

Wages: The National Living Wage, announced in July’s budget, is still due to be introduced in April 2016. This will raise the compulsory minimum wage for people over 25 years to £7.20 per hour (outside London).

Al Rayan Bank was recently accredited as a 'Living Wage Employer' by the Living Wage Foundation, joining companies in the UK that voluntarily opt to pay their employees a 'Living Wage' which is significantly higher than the National Minimum wage. 

You might also be interested in...