The Autumn Statement- what might affect you?
When we had a Labour government, the Autumn Statement was an exciting mini-Budget event, with surprise announcements and new legislation. George always promised his Statements would not be any such thing and would merely update the country on his fiscal and economic progress and that’s largely what he has done. No shock announcements (unless the scrapping of the widely unpopular tax credit cuts comes as a surprise to you) but a few little tweaks and adjustments to existing policies to (in most cases) offer a reasonably warming Statement as we head into winter…
So what might you need to know from the Chancellor’s musings earlier today?
No more whiplash cash-for-crash
It seems the government has looked upon the practice of earning a living claiming whiplash quite sternly. Currently those complaining of a non-existent sore neck (at the less horrible end) or those filling cars with non-existent relatives or worse, causing a crash can claim for personal injury from someone’s insurance company and get a cash payout. To try and make it at least a little bit harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation.
However, there is still redress for those genuinely imjured, as instead you will be able to take your case to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000.
This is, obviously, going to be an inconvenience, and possibly mean that those genuinely affected by whiplash (which really does hurt) don’t get a payout along with the fraudsters, but on the up side the government predict that annual insurance costs for drivers could fall by between £40 to £50 a year. Or they would, if insurance companies were to pass on their cost savings to customers…
More money back for delayed trains and flexible tickets
We’ve told you about how to claim for delayed trains before, but until this summer’s announcement that you will be able to get compo in cash, it was strictly a vouchers-only experience. Now, the Chancellor has announced that in future, commuters will also soon be able to claim compensation from their rail tickets if their train is more than just 15 minutes late, down from an interminable and cold hour-long wait or more.
Also, new flexible season tickets, which would permit part-time season tickets for example, will soon be available on certain lines across the country, including C2C between London and Essex, and the Great Northern Route on Thameslink.
From April 2016, the basic state pension will rise to £119.30 per week, an increase of £3.35. This will be “the highest real terms increase to the state pension for 15 years” and the government are hoping you won’t notice all the current articles about people missing out over the new pension changes…
From 1 April 2016 people purchasing additional properties in which they don’t actually need to love, such as buy to let properties and second/holiday homes will pay an extra 3% in stamp duty. That’s 3% on top of current rates, so if you own a couple of mansions, you will be paying quite a lot of stamp duty from now on.
Money raised from second home stamp duty will be used to help those struggling to buy their first home- like the new Help to Buy equity loan scheme for London which will give buyers 40% of the home value from early 2016, as opposed to 20%, as the current scheme offers.
It is now illegal for young people to be NEETs (Not in Education, Employment or Training) and the Chancellor has previously announced that three million new apprenticeships will be created by 2020, paid for by charging large employers.
The new apprenticeship levy (tax) will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill, but only where the apprentice tax would come to more than £15,000. This means that it is only really ginormous employers who will have to factor this extra cost, along with the new living wage rates of course, into their wage bill, as it will only be employers whose wage bills are over £3 million; less than 2% of UK employers will therefore have to cough up.
Tampon Tax- a happy compromise?
Last but definitely not least, the Chancellor has decided to appease the little lady, by wading into the tampon tax argument. Around £15 million in VAT is collected each year on sanitary products, just on sanitary products at 5% VAT, and, as we explained to you last month, the the government cannot legally remove all VAT on sanitary products. So instead, they have decided to donate this controversial VAT, or its annual equivalent into a fund that will be donated to women’s charities over this parliament, or until the UK can remove the tax from sanitary products under EU rules. Nice job.