Autumn Statement 2015: what the Chancellor didn't say
The Autumn Statement document provides more announcements that will affect your money.
Now that the Chancellor has delivered his Autumn Statement speech, attention turns to the Autumn Statement document. As always with these large financial setpieces, there are a few interesting announcements in there that affect your money that weren't mentioned in George Osborne’s speech.
Let’s take a look at what the Chancellor didn’t say.
ISA limits to be frozen for 2016-17
The amount that we can save into a tax-free ISA tends to go up each year by the inflation figure. However, with inflation so low this year, and even occasionally dipping into the negative, the limits will not be changing in 2016/17. As a result the ISA limit will remain at £15,240, while the Junior ISA and Child Trust Fund limits will be kept at £4,080.
Check out the top accounts in The best Cash ISAs for the 2015/16 tax year.
Flexible rail season tickets and delay compensation
New flexible season tickets will soon be available on certain lines across England, including the Great Northern Route on Thameslink and the C2C between London and Essex.
Commuters will also soon be able to claim compensation if their train is more than 15 minutes late, a reduction on the present 30 minutes.
Employee share schemes
The Government has promised a number of technical changes to employee share schemes which will “simplify aspects of the tax rules” in the Finance Bill 2016.
For more on how the schemes currently work, read Employee share schemes: everything you need to know.
Salary sacrifice
According to the Autumn Statement document, the Government “remains concerned” about the growth of salary sacrifice arrangements and is considering taking action. For now it is simply gathering evidence on exactly how people are making use of salary sacrifice schemes.
Typical uses include covering rail season tickets and childcare vouchers, but some schemes have even promoted salary sacrifice as a way to cover the cost of expensive mobile phones.
Pension tax relief
The Government has been open about reviewing the very generous tax breaks on offer to higher or additional rate taxpayers.
There will be no imminent changes though: the Autumn Statement document confirms that the Government is still considering the responses received from its consultation on changes, with a response to be published in next year’s Budget.
Read Pension tax changes: what should higher rate taxpayers do now?
Selling on annuities
The Government confirmed earlier this year that it wanted to establish a secondary market for annuities, allowing pensioners who have already converted their pension pot into an annuity to sell it on.
The Autumn Statement document reveals that further details will be published in December.
Innovative Finance ISA
The Innovative Finance ISA is the name of the new type of ISA which will launch next year, allowing savers to enjoy the usual ISA benefits on peer-to-peer loans. The Autumn Statement document confirms that from next autumn the list of investments that can be included within the Innovative Finance ISA will be extended to include debt securities offered on crowdfunding platforms.
See how much the top peer-to-peer providers are paying in our savings and ISA centre.
Your ISA after death
The Government will include legislation that allows the ISA savings of somebody that has died to continue to benefit from tax advantages during the administration of their estate. However, it first wants to conduct a “technical consultation” with ISA providers on how this could work.
Inheritance Tax and your pension
Thanks to the pension freedoms, many pensioners are choosing to keep their pots invested, dipping into it as and when needed. This is called drawdown.
The Autumn Statement document confirms that the Government wants to ensure that no Inheritance Tax charge is levied if a pensioner designates funds for drawdown but does not withdraw all of the funds before they pass away. What’s more, this will be backdated to 6th April 2011.
Read How to cut your Inheritance Tax bill.
Self-assessment tax returns
Draft legislation is to be published which will see a “new, simpler process for paying tax” established. For taxpayers in self-assessment who have “simple affairs” where HMRC already has all of the data it needs to calculate what tax they owe, the taxpayer will simply be sent a calculation of their bill. This will double as a demand for payment, though taxpayers will be able to challenge and appeal the calculations.
This new system will come into effect in the 2016/17 tax year.
Check out How to get your online self-assessment tax return right.
Student loans
If you have an outstanding student loan, money is taken from your salary in order to repay that loan. An earnings threshold is in place – 9% of anything you earn over that threshold is then paid towards your loan.
The Autumn Statement document confirms that students on Plan 2 repayment schemes (those who took out a loan after September 2012) will have their thresholds frozen for the next five years.
Students on Plan 1 repayment schemes (for loans taken out before September 2012) had seen the thresholds rise every year since 2012.
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