Autumn Statement looming : November 25th
George Osborne's tax credit changes loom!
Chancellor Osborne will give his first “All-Tory” Autumn Statement on Wednesday November 25th 2015.
Chancellor George Osborne will next week use his Autumn Statement set out details of cuts to spending of around 25 per cent for unprotected departments over the next four years.
So far 11 ministers have settled their cuts, including work and pensions, energy and climate change, transport, communities and local government, and environment, food and rural affairs. Health and international development are protected from cuts.
Key areas including defence, business, justice and the Home Office are still negotiating, with Home Secretary Theresa May holding out to try to protect the police budget in the wake of the Paris terror attacks.
However, alongside negotiations over spending ministers have also been wrangling over the contents of the manifesto. Every line of 84-page document has been divided up to gives department ownership of every policy.
They will be published in a series of business plans, with deadlines set for them to be delivered. Ministers were told that funding will only follow what the manifesto committed. Departments have said how much a pledge might cost, then the Treasury has told them it can be done cheaper.
What changes for Financial Advisers?
Pensions and Taxation
The Autumn Statement could include an update on pension taxation, which the government has been consulting on in recent months.George Osborne is to give the 2015 Autumn Statment on November 25th 2015.
Tax credits are likely to be be the big announcement, after the Chancellor George Osborne promised to soften the blow of the £4billion planned cuts that would hit working families.
The Chancellor announced in his Summer Budget he would review the way pensions are being taxed, mulling a change from the current way to one found in ISAs.
Currently pension savings vehicles offer tax relief upfront and collect taxes at point of withdrawal ('exempt, exempt, taxed') whereas ISAs do it the other way around ('taxed, exempt, exempt').
Issuing a green paper in July, the government said it wanted to create a simpler and more transparent way of taxing pensions to incentivise more people to save.
The move followed proposals brought by trusted adviser, The Centre for Policy Studies research fellow Michael Johnson, who had previously called for a full unification of pensions and ISA regimes and the introduction of a workplace ISA to replace traditional retirement savings vehicles.
George Osborne will push on
In spite of the recent revolt by the House of Lords over tax credit changes, George Osborne has vowed to push on with his plans to turn Britain into a 'low welfare high wage economy'
“I believe we can achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping in the transition.
That is what I intend to do at the Autumn Statement.”