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Autumn Statement 2016: tax

What the latest Autumn Statement means for you

The Chancellor announced changes to salary sacrifice schemes

The Chancellor, Philip Hammond, will scrap tax and national insurance benefits for salary sacrifice schemes from April 2017.

Pensions, pensions advice, childcare, cycle-to-work schemes and ultra-low emission vehicles will be exempt from the changes, and any arrangements in place before April 2017 will be protected until April 2018. Arrangements for cars, accommodation and school fees that are in place before April 2017 will be protected until April 2021. 

The government will also consult on how it values benefits in kind for tax purposes. 

Find out more: discover how salary sacrifice can cut your costs and boost your pension

Rates and allowances

Mr Hammond confirmed the government’s commitment to increase the personal tax allowance to £12,500 and the threshold for higher-rate tax to £50,000 by the end of this parliament, but announced no further changes. 

From 6 April 2017, the personal allowance will rise to £11,500. People with the standard personal allowance will start paying tax on earnings above £45,000. Additional rate tax will continue to apply on incomes over £150,000. 

The band of savings income that is subject to the 0% starting rate will remain at £5,000 for the 2017/18 tax year. 

Find out more: Work out your tax-free entitlement

Taxes on savings

There will be no changes to the previously announced increases for Isa and Junior Isa allowances. From 6 April 2017, adults will be allowed to save up to £20,000 into an Isa, while parents and grandparents will be allowed to subscribe up to £4,128 into a Junior Isa.  

Mr Hammond said that 98% of adults now pay no tax on income from savings as a result of tax changes in recent years. 

Find out more: when do you need to pay tax on your savings accounts? 

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