Autumn Budget 2017: Top Ten Takeaways

1. UK growth downgrades

Independent body the Office for Budget Responsibility (OBR) was forced to cut its projections for GDP growth for 2017 and 2018, which was initially expected to hit 2% and 1.6% respectively.

The OBR now expects to see GDP grow 1.5% in 2017, 1.4% in 2018, 1.3% in both 2019 and 2020, before picking back up to 1.5%, and finally 1.6% in 2022.

Hammond added that inflation is expected to peak this quarter at 3%, before falling back towards the Bank of England's 2% target over the next year.

Autumn Budget 2017: Stamp duty boost for first-time buyers

2. 'Stubborn' productivity growth

The Chancellor was downbeat on productivity performance, which he said "regrettably… continues to disappoint".

OBR forecasts had assumed that productivity growth would return to pre-crisis levels of about 2% a year, but it has remained "stubbornly flat", according to Hammond.

3. EIS investment limits

Hammond announced plans to double EIS investment limits for knowledge intensive companies, while ensuring EIS vehicles are "not used as a shelter for low risk capital preservation schemes".

He said the government is publishing an action plan today to unlock over £20bn of new investment in UK knowledge-intensive, scale-up businesses.

The Chancellor aims to do this through a new fund in the British Business Bank seeded with £2.5bn of public money.

While the Chancellor was vocal on EIS investments, he was surprisingly quiet on VCTs, which was left to a paper published online.

The government will further target VCTs towards investment in higher risk areas of the market, while also responding to concerns that certain conditions currently placed on VCTs restrict their activities unnecessarily.

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4. Government investment

Hammond also announced a string of government-backed investments, which he said would help to build a Britain ready to face a "future full of change, full of challenges, and full of opportunity".

Among the beneficiary of new government investments will be the National Productivity Investment Fund, which has seen its backing increased to over £31bn.

Meanwhile, £500m is to be invested in 5G, fibre broadband and AI.

5. Stamp Duty and housing boost

As part of efforts made by the government to support the housing market, stamp duty will be scrapped for first-time buyers on purchases up to £300,000 and for the first £300,000 for homes in London up to £500,000.

The government is also going to make £15.3bn of new financial support available for housing over the next five years, bringing total support for housing to at least £44bn over this period. It also promised to build 300,000 new homes on average per year over the next five years.

Autumn Budget 2017: Lifetime allowance increase confirmed

6. Asset Management 'strategy'

The government has pledged to publish its long-term strategy on how it will support the asset management industry in the UK. This covers areas such as innovative investment ideas and financial technology.

7. Diesel penalties; investment in driverless cars

The Chancellor also announced the government will increase Vehicle Excise Duty on new diesel cars from April next year and also pushed older diesel cars into higher tax brackets. However, the latter move excludes vehicles bigger than cars such as white vans.

Meanwhile, he confirmed £500m in funding for the electric and driverless sector, with £100m to extend the grant for motorists buying plug-in cars and a further £400m to develop the electric charging infrastructure.

8. Continued tax avoidance crackdown

It was also announced the HM Treasury is hoping to raise £4.8bn by 2022/23 through a package of tax avoidance measures. Hammond said: "Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed. And some of these royalties relate to UK sales.

"So from April 2019, and in accordance with our international obligations, we will apply income tax to royalties relating to UK sales, when those royalties are paid to a low tax jurisdiction."

9. Borrowing and debt

Turning to the budget deficit, the Chancellor said borrowing is expected to stand at 2.4% at the end of the 2017-18 fiscal year, falling to 1.5% in 2020-21 while net debt is expected to peak at 86.5% of GDP this year before falling to 86.1% in 2019.

Borrowing is forecast to be £49.9bn this year, some £8.4bn lower than forecast in the Spring Budget, with Hammond saying "borrowing will fall in every year of the forecast" from £39.5bn next year to £25.6bn in 2022-23, to reach its lowest level in 20 years.

10. Lifetime allowance for pensions

Budget papers have confirmed the lifetime allowance (LTA) for pensions will increase to £1,030,000 for the tax year 2018/19.

The LTA currently stands at £1m and is about to be increased in line with the Consumer Prices Index (CPI).  

The increase, which happens in April next year, will be calculated in line with the change in CPI over the 12-month period between September 2016 and September 2017 rounded to the next £100.