Summary of announcements made in the Autumn Statement that will impact the UK retail sector
Economic overviewThe Chancellor, George Osbourne, revised up the growth projection for 2014 and 2015, but revised the profile down thereafter, delivering a more optimistic prognosis of economic growth and borrowing than many economists had expected. The Office for Budget Responsibility forecasts economic growth to reach 3.0% this year, followed by 2.4% in 2015, 2.2% in 2016, 2.4% in 2017 and 2.3% in the final two years of the forecast. He also suggested that the deficit had been cut in half since 2010, with borrowing set to fall from £97.5bn 2013-14 to £91.3bn in 2014-15. Deficit projected to fall to £75.9bn in 2015, £40.9bn in 2016, £14.5bn in 2017 before reaching a £4bn surplus in 2018. Debt as a share of GDP falling in every year until forecast to be 72.8% in 2019-20.ConsumersThe big news of the today is the reforms laid out for stamp duty which are due to come into effect at midnight tonight. Stamp duty will now be paid at a rate of 2% for properties sold between £125,000 to £250,000, 5% up to £925,000, 10% up to £1,500,000 and 12% for any property above the top threshold. The Chancellor claims that stamp duty will be cut for 98% of homebuyers. The tax-free Personal Allowance, which was set to rise to £10,500, will rise instead to £10,600. This equates to an additional £825 per year for all increases that the coalition has made to personal allowances since 2010. The threshold will also rise for higher rate tax payers.Other pre-election giveaways were on a small scale, such as air passenger duty being abolished for children.BusinessSupport for small businesses by extending the doubling of Small Business Rate Relief to April 2016; around 385,000 of the smallest businesses will continue to receive 100% relief from business rates until April 2016, with around a further 190,000 benefiting from tapering relief. Support for all businesses paying business rates by extending the 2% cap on the RPI increase in the business rates multiplier to April 2016 Additional support for the retail sector by increasing the £1,000 business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50,000 or below, to £1,500 in 2015-16, benefitting an estimated 300,000 properties There were also plans to abolish employer National Insurance contributions up to the upper earnings limit for apprentices aged under 25 – The government will abolish employer NICs up to the upper earnings limit for apprentices aged under 25. This will come into effect from April 2016.