Taxation

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“On personal and household incomes, personal income tax thresholds will rise next April, with the basic rate at which income tax is paid rising by £500 to £11,500.”

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This statement didn’t have ‘rabbits out of hats’ moments to it that were a feature of George Osborne’s statements. We already had been told there was going to be big infrastructure support offerings, and that was the case.

On personal and household incomes, personal income tax thresholds will rise next April, with the basic rate at which income tax is paid rising by £500 to £11,500. The point at which the higher rate of income tax (40%) is applied is also to rise to £50,000 by the end of the Parliament (from £43,000 now – a 16% rise). Together this will take more lower income workers out of income tax entirely but also will remove many from paying tax at 40% who have drifted into being higher rate tax payers, a rate that was originally conceived to only be paid by those on the top incomes and last year paid by 4.5million people (3 times the number paying at that rate in 1990) and 7% of the UK population now.

At the bottom end of incomes the minimum living wage is to rise to £7.50 (from £7.20) in April 2018 (more than a 4% increase). This is a move that will make a material difference to the incomes of many on the lowest income in the UK, at least before cuts in work benefits are considered which will wipe this out and some according to IFS analysis (which says this will only put back £1 billion of the £3 billon of in-work benefit cuts previously announced). Thankfully there were no further announcements of significant welfare cuts in this statement.

The Chancellor also announced this will be both his first and his last Autumn statement. From next year we will have a budget in the autumn instead of the spring replacing the Autumn statement therefore.