The 2015 Autumn Statement was released on November 25th alongside the Spending Review. Chancellor George Osborne gave a speech accompanying the publication of the materials, speaking for over an hour about the big challenges that the UK would face over the coming months. He also talked about how the changes would affect the income of the public.
The biggest announcement was that the proposed cuts to tax credits would be scrapped. In the Summer Budget plans for cuts that would save up to £4.4 billion were outlined but there were a number of concerns about how this would affect people on low incomes. The plans were passed through the House of Commons and would have come into force in April 2016 but the House of Lords blocked the move.
There will still be some cuts to help reform tax credits. The major one is changes to the Universal Credit criteria. This new system will combine tax credits and five other benefits into a single one and will be introduced in the next few years. Alongside this limitations will be put on the amount of tax credits a family with more than two children can claim. Finally, the rate of housing benefit in the social sector will also be capped so it cannot exceed that in the private sector.
Moves will also be made to help reduce the housing benefit bill in the UK. These include encouraging builders to build more affordable starter homes, a London Help to Buy Scheme and shared ownership schemes. The aim is to encourage aspirational home ownership so that people want to and are more able to buy their own homes in the future.
One of the biggest changes will affect investors who purchase buy-to-let properties. From April people will have to pay a 3% surcharge on top of the stamp duty when they buy a property with the aim to rent it out. The charge will also be applied when people purchase a second home. This change could hit the sector very hard.
If you would like more information about the Autumn Statement and Spending Review and how the announcement will affect you can contact Robert Carlton Independent Financial Advisors. We offer support and advice for people across Middlesbrough and are always happy to keep you well informed about the latest developments in the world of finance and how they will affect your business and personal finances. When you are working with us, you can ensure you are prepared for the changes that will come over the next few years.