The Autumn Statement can often be a second ‘Budget’ with multiple tax regime amendments. However, whilst the Chancellor yesterday spoke for more than an hour about what he was going to spend and what he was going to cut, there weren’t a great many changes to the tax regime to help him raise the required funds.
The UK economy is continuing to outperform the Eurozone and is the fastest growing country in the G20, which has resulted in the Chancellor having to borrow £8bn less than originally forecast. This “saving” has enabled him to have a complete u-turn on his tax credit proposals, which caused such an outcry when they were announced that they were defeated in the House of Lords. This is likely to affect many employees in the care sector and may help ease the discretionary wage pressures faced by operators.
To some extent the lobbying and press coverage of the impact of NLW on the care sector does appear to have been taken into account. By far the most important announcement to the care sector was the statement that, to help pay towards social care costs, councils will be able to add 2% to council tax bills. Clearly the detail of this policy will be key, and consideration should be given to the points a) councils will need to drive this policy forward, and b) there will be a variance across the country of additional funds available to fund fee increases for operators. The availability and timing of additional funds compared to the real cash flow implications of April 2016 payroll increases do need to be considered and planned for.
Councils will also have the flexibility to set differing business rates to try to entice new businesses into their area, which may have an impact to multi branch services such as domiciliary care.
A 0.5% apprenticeship levy applying to payroll costs above £3m, which will only apply to the largest 2% of employers, should not have any significant effect on care operators.
Other revenue raising measures were mentioned, including a 3% Stamp Duty Land Tax “surcharge” for those buying second homes or buy to let residential properties. This may be a further cost increase for the owners of supported living businesses who retain properties personally and rent to service users on a buy to let basis.
Although George can’t remove the “tampon tax” without EU consent, he has promised that any monies raised through it will be directed to women’s charities.
The 3% diesel supplement on company cars, that was due to be removed in April 2016, will now stay in place until 2020, which I’m sure was for George to try and maintain his “green” credentials.
Despite the lack of revenue raising measures, monies were promised to build new homes, new transport infrastructure, a seven days a week NHS and protection of the Police Budget. Where all of these monies are going to come from I’m not sure, but George the Builder is laying what he believes to be the foundations for a prosperous future for the UK.