Chancellor’s Autumn Statement: Tax Cuts, Innovation, But Silence on Inheritance Tax and Housing

By Daniel Hickey, Managing Director

This week’s Autumn Statement, delivered by Chancellor Jeremy Hunt, brought both anticipated revelations and surprising omissions, leaving many with a curious mix of relief and uncertainty. As the dust settles from Hunt’s presentation, the promises of tax cuts and investments in innovation echo loudly. Yet, notably absent from the discourse was any mention of boosting new home sales or support for the housing industry.

Hunt’s grand finale, the national insurance rate cut for employees and the corresponding reductions for the self-employed, undoubtedly captured attention. A two per cent drop in the employee rate from 12% to 10% and adjustments in class 2 and 4 contributions signify a move aimed at easing the financial burden on workers. Hunt contends that reducing national insurance and business taxes, among 100 other measures, will help drive economic growth. Whilst the cut in national insurance is undoubtedly welcome news for the millions of taxpayers across the country, the reality is that workers are losing almost five times as much to the income tax threshold, owing to increased wages due to inflation and a rise in minimum wages.

Despite being a centre point of discussion in the lead up to the Autumn Statement, a potential target for home buyer support or reform in inheritance tax, neither failed to secure a mention in the Chancellor’s statement. There were allocations for Artificial Intelligence investment, along with tax deductions for business investments. However, amid these announcements lay the striking silence on bringing back support for first time buyers through the now defunct Help to Buy and associated ISA schemes.

There was mention of support for private landlords, giving 1.6 million households an average of £800 of support next year, but as highlighted by Gavin Richardson, the Managing Director of BTL broker Mortgages for Business: “What the housing sector needed was an Autumn Statement that supported landlords. Instead, we’re still stuck in landlord limbo.” The same can be said of the housing sale and purchase market.

Sadly, whilst the Autumn Statement took the first steps towards tax benefits for workers, easing the stress of cost on UK taxpayers and encouraging much-needed economic growth, there was little to be said to any real benefit in the housing market, beyond confirmation that the Government has extended the Mortgage Guarantee Scheme for a further 18 months. There was a murmuring of easing planning approvals for housebuilders but in essence the property market has been largely overlooked, and the industry speculation of a return of Help to Buy, or a stamp duty holiday to stimulate the market did not come to pass on this occasion.