Following changes of leadership in the Conservative Party earlier this year, the new UK Chancellor of the Exchequer, Philip Hammond, presented the UK Autumn Statement and Spending Review to parliament on 24th November. These reports are always lengthy and whilst covered extensively in the UK press I like to pick up on the points that have relevance relevant to expats, particularly those who are resident in the UAE. I have read through all 69 pages of the official report so you don’t have to.
Many of the economic suggestions and changes have been announced with ‘Brexit” in mind as the UK, and much of the rest of the world, is in a period of economic uncertainty.
With what is being described by some as a ‘black hole’ in the nation’s finances, this was a measured budget with no sweeping changes or surprises. The main points of relevance to British expats are:
- The Personal Allowance, the annual Income tax threshold is to increase from the current level of £11,000 to £11,500 in April 2017. The higher rate threshold will increase from £43,000 this year, to £45,000 in the tax year 2017/18.
- There was a repeated commitment to increase the higher rate income tax threshold to rise to £50,000 and the Personal Allowance to £12,500 by the end of the Parliament.
- As announced in the Budget of 2016 Class 2 National Insurance Contributions will be abolished from April 2018. This is a class that many expats have been able to pay for their voluntary contributions and means that expats will only be able to make payments of Class 3 contributions which are higher.
- Insurance premium tax (IPT) will rise from 10% to 12% with effect from June 2017. This will affect premiums payable on home and car insurance.
- There is a proposed ban on the upfront fees that have been charged by letting agents in England. These are the fees charged for obtaining references and credit checks and the move is designed to improve competition in the rental market. The Department for Communities and Local Government (DCLG) will consult with interested parties ahead of any legislation.
- The government has announced that it will be publishing a consultation document on options to tackle pension scams, including banning cold calling in relation to pensions, giving firms greater powers to block suspicious transactions. This will obviously affect the UK only but it is worth pointing out that anyone should be wary of cold callers in respect of any financial matters. Instead seek out suitable advisers yourself, checking qualifications, reputation and recommendations.
- There was also reference to further possible changes regarding the way in which transfers to overseas pension schemes operate with a likely tightening of criteria, and possibly how that are taxed in the UK, but we will have to wait and see what happens and if there are changes I will be writing about them.
- There was an announcement to the permanent status of non-domiciled individuals but this is entirely a different matter to being considered UK non-resident for tax purposes, the legal status of the overwhelming majority of expats.
- This was the last ever Autumn Statement as it will be replaced by an Autumn Budget. In future, the Chancellor will instead deliver a Spring Statement in response to statistics issued by the Office of Budget Responsibility, but this will not contain any fiscal measures.
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