The Autumn Statement presented on December 3 is bringing a raft of changes, involving Stamp Duty and tax-free personal allowance, all with a positive impact.
Employees will now be able to earn £10,600 before they get taxed, which is an additional £100 compared to last year.
Stamp duty will be cut for 98% of people who currently pay it, and children will be exempt from tax on economy flights from May 2015 for under 12s, and March 2016 for under 16s, saving an average of £26 on a flight to Europe and £142 on one to the US.
The statement will also allow spouses to inherit their partner’s individual savings account (ISA) benefits after their death from December 3, 2014, which they will be able to use after April 6, 2015.
James Pinchbeck, Marketing Partner Streets Chartered Accountants, said: “Whilst the purchase of a home is not a frequent one, it most likely is the most expensive one the majority of us will make and help in making that first purchase or move up the property ladder will be most welcome.
“Therefore the move to reform Stamp Duty Land Tax, the tax paid on the purchase price of a property, must be good news for most. With the new lower rates in theory being effective from 4th December, anyone looking to complete or exchange contracts may need to act quickly.
“The announcement to increase the threshold at which income tax is paid to £10,600 and the rate at which the higher rate tax is paid to £42,385 from April 2015 will be welcomed by all.”
Councillor Colin Davie, Executive Member for Economic Development at Lincolnshire County Council, said: “Today’s statement has a lot of good news for small businesses, which are the backbone of our local economy and some of today’s announcements will have benefits not just for businesses, but residents too.
“In a rural county like Lincolnshire, news of the freeze in fuel duty will mean more money in everyone’s pockets.
“The opening up of a new 4G spectrum will mean better mobile phone connectivity, something that is becoming more and more vital for residents and businesses alike.
“The abolition of stamp duty on properties under £125,000 and the increased investment in affordable housing will also be of benefit, particularly to younger people trying to get their foot on the property ladder.”
Simon Beardsley, Chief Executive of the Lincolnshire Chamber of Commerce: “We’re pleased to see that the Chancellor has used the Autumn Statement to demonstrate that he is listening to the needs of businesses across the country.
“We are encouraged by the government’s continued efforts to curb business rate increases and the announcement of a review into the future structure of Britain’s business rates system. This iniquitous tax is the highest in Europe and a drag anchor on investment and growth.
“Access to funding has been a growing concern for our members. We have actively sought out new funding avenues like the Greater Lincolnshire Capital Growth Fund and our Start Up loans scheme, and we are encouraged by the Chancellor’s announcement of additional funding to programmes which promote business growth.
“We continue to advocate the growth of exporting in the East Midlands, and our dedicated International Trade Expert is able to offer hands on guidance for businesses interested in exporting. The £20m new package of support to help businesses take their first steps into exporting will ensure that we are able to offer further support to businesses.
“By abolishing employer’s National Insurance for young apprentices and reducing the costs of employment, we hope that more businesses will hire apprentices. By improving in the skills of individuals and teams through apprenticeships, a stronger Lincolnshire economy can be built.”
However some are not so taken with the Chancellor’s announcement today, particularly regarding funding.
Councillor Ric Metcalfe, Leader of City of Lincoln Council, said: “This is an electioneering budget with lots of misleading statements about new money for projects that are mostly recycled and previously announced.
“There is a clear failure by the Government to meet its own targets for reducing the deficit on the current account. While there is some growth it is based on consumer spending and not investment in capital projects.
“There is a fundamental problem about government tax income – largely because of the issue of underemployment and low pay. Employment growth is mainly in the low paid sectors of the economy, such as service industries, hotels, restaurants, hairdressing, nail bars and others but low paid areas bring in little or no tax. This increases the cost of state subsidy for low pay through all the in work benefits that people who are on low incomes are entitled to, such as tax credits and housing benefits.
“Not enough is being done to get some sustainable growth going with higher skilled and better paid employment for people. There is a real need to address the introduction of the Living Wage to start to tackle the issues around low pay.
“More has to be done through the tax system to get people on higher incomes and with greater wealth to contribute to the public good, for example a 50p tax rate, mansion tax, maintain tax on company profits at 21 per cent, increase the banking levy and do more on hedge fund income.
“There are the continuing cuts in public spending yet local Government has already seen its budgets slashed by 40 per cent and cannot take any more.”