Autumn Statement 2014: Winners and losers

Felicity Hannah
Autumn Statement
Autumn Statement

Today's final Autumn Statement of this parliament was a fraught affair. The house erupted in cheers and boos, sneers and hurrahs.

With an election so close, both spin and substance mattered in today's statement – and Osborne was clearly aware of that.

He rapidly reeled off numbers that he claimed show how effective the Coalition's austerity has been; numbers that will need to be carefully unpicked by economists to see who's really won and lost in today's statement. After all, it's in the government's interest to make everyone feel like a winner – and the analysts' job to actually break down the numbers.

But in the meantime, who are the obvious winners and losers of today's statement? Here's a rundown...

House buyers – win some, lose some

Let's start with the biggest news; Osborne has totally changed the stamp duty thresholds. In a move that has been celebrated as a major tax reform he has agreed to transform stamp duty into a progressive tax.

This means there'll be no tax to pay on the first £125,000 paid, 2% on the portion up to £250,000, 5% on the value between £250,001 and £925,000, 10% on the next chunk up to £1.5 million and 12% on everything above that.

It has been described as his answer to calls for a mansion tax, but Osborne claims it will cut stamp duty for 98% of those who pay it.

That certainly seems true - in fact, it has more than halved the stamp duty bill on a house that sells for £275,000. Today it's £8,250 – from midnight tonight it will be just £3,750.

However, some London house buyers say this is likely to heat up the property market just as it had started to cool – meaning homes currently within buyers' budgets could rocket up in price. It's also been suggested that this will benefit house sellers more than buyers, who will see their homes no longer capped in value by the constraints of the stamp duty threshold. Buyers may pay less in tax but could end up paying more for their homes...

And those buying expensive houses definitely lose. Anyone buying a £2 million house will now have to pay £150,000 in stamp duty – that's £50,000 more than before!

Fans of living within our means – lose

The chancellor admitted he would miss his short-term targets for cutting the budget deficit, but pledged to resolve the country's finances by the end of the decade.

GPs, Gurkhas, veterans with hearing difficulties, helicopters and search & rescue – win

Fines recently levelled against the UK's banks have been earmarked for a variety of schemes, including £1.2 billion to be invested in GP services, and Libor fines to be invested in emergency services, Gurkhas and veterans with hearing problems (they get £10 million).

Meanwhile search and rescue charities, along with air ambulance charities will receive VAT refunds following lobbying from Prince William.

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Asda cuts petrol and diesel prices
Asda cuts petrol and diesel prices

Drivers - win

Fuel duty is to remain frozen. There had been warnings that even a 1p increase could add more than £400 a year onto the average driver's bill. With taxes falling this could actually see more money in motorists' pockets.

Google – lose

Plans for a so-called Google tax were unveiled, which will charge a 25% levy on profits made by tech companies in the UK but diverted elsewhere. Although Google has been the unwilling poster child for people demanding this tax, it's also going to affect big names such as Starbucks and Amazon.

Workers – win/lose

While the Chancellor was keen to point out that unemployment has fallen, the Joseph Rowntree Foundation was quick to highlight that three-fifths of people who entered employment in the last year are paid below the living wage.

However, Osborne increased the personal tax allowance to £10,600, which the Treasury claims will mean a total wage boost of £825 a year for working people.

Non-doms – lose

Non-doms, i.e. British citizens who have registered for non-domiciled status that means they aren't charged tax on earnings made abroad, will now have to pay more to preserve their status.

Osborne plans to introduce a new £90,000 charge for some non-doms. There's currently a £30,000 annual charge but that will rise to £60,000 a year for those who have been here for 12 of the last 14 years, and to £90,000 for anyone who has been here for more than 15 of the last 17 years. Ouch.

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Graduates throwing mortarboards
Graduates throwing mortarboards

Postgraduate students – win

Graduates wanting to continue their studies after their bachelor degrees will now be able to get student loans of up to £10,000 to pay for the privilege.

Let's hope that doesn't mean more students feel they must gain a masters to compete, loading our graduates with greater debt.

Banks – lose

The chancellor revealed he would be limiting the losses from the financial crisis that banks can write off against future tax. That's now limited to 50%, which could raise £4 billion over the next five years. However, bank shares fell when this was announced.

Small businesses – win

UK small businesses will benefit after business rates relief was doubled for a further year. An inflation-linked increase in business rates was also capped at 2%. The Federation of Small Businesses said it is "delighted".

Sun seeking school kids - win

Air passenger duty is to be scrapped for children under 12 from May next year, and will be cancelled for anyone under 16 the year after.

Heirs – win

From today, anyone inheriting ISA savings will be able to receive the money tax free. The chancellor also revealed there would be an overhaul of pensions inheritance laws, so that the 55% 'death tax' on unused pension pots will be done away with entirely.

Unused pension pots and joint life or guaranteed term annuities will be able to be passed on tax free, from April next year. "We are delivering fairness for savers," insisted the chancellor.

Aid workers were also given an exemption from inheritance tax, which currently applies to members of the armed forces who die in service. However, you have to have an estate worth more than £325,000 for that tax to affect you.

George Osborne – winner or loser? You decide...

The Chancellor used his speech to plead with voters for the chance to "finish the job" and warned that deviating from his economic plans risked 'squandering prosperity'.

However, with plenty of detractors claiming the Coalition has failed, it will soon be time for voters to have their say on the Chancellor's economic success. There are just six months to go to an election...

Have your say right now by sharing your views on today's statement using the comments below

Osborne Unveils Autumn Statement 2014
Osborne Unveils Autumn Statement 2014

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