Forecourt Trader - 30 years at the heart of the fuel retailing community

Money Talk: Autumn in the wilderness

If there wasn't really much drama around the Autumn Statement that the Chancellor delivered on the 23rd of November, there was at least a little of the flavour of pantomime: this was to be the last 'Autumn Statement' because in future the 'real Budget' will move to autumn; so what we used to know as 'The Budget' will be in the autumn, and in its' place we'll have a 'Spring Statement' although the name won't actually change until after the 'Budget' due next March (2017). Confused? Maybe they should just call it 'Springwatch' and 'Autumnwatch'.

The Chancellor started his statement by claiming that the UK economy was "resilient" despite reports from the OBR (Office of Budget Responsibility) that Brexit would cause a £122bn 'hole' in government finances over the next four years; something which he didn't go out of his way to specifically confirm or deny. Think about it: £122bn is a staggering amount of money. Politicians may find it easy to be vague about those sorts of figures; accountants and economists don't. After that sort of (virtual) admission, everything that followed was almost bound to be a bit of an anticlimax. However, in case you missed them, some of the key points:

Personal Tax Allowances

The Basic Income Tax threshold to rise to £11,500 (from the current £11,000) effective from 6th April (2017). The previous Chancellor's declared intention to raise this to £12,500 by the end of this Parliament' remains.

The Higher Rate Income Tax threshold to rise to £50,000 (from the current £42,386) 'by the end of this Parliament'. In normal circumstances that should mean '2020' although given the nature of recent events there must be at least some doubt as to whether that figure would be achievable in the event of an earlier General Election.

National Living Wage

Rising to £7.50/hr (from the present £7.20) from April (2017). This affects workers aged 25 and over.

National Minimum Wage

There is no change in other National Minimum Wage rates any change to those will be announced next year to take effect from 1st October (2017) so they remain: £6.95/hr21-24 year olds

£5.55 /hr 18-20 year olds

£4.00 /hr Under-18's

Insurance Premium Tax

Rising to 12% (from the present 10%) from 1st June (2017)

It's worth remembering that as recently as October 2015 (that's only just over a year ago) the rate was 6%; that's quite an increase in a relatively short time, and it's a tax that affects every business and almost every consumer. The cost of insuring many forecourt premises is already pretty steep, and this will simply add to that burden; then think of cars, employer's liability, public liability, and all the other policies your business renews each year. Ouch!

National Insurance

Employee and employer NI thresholds to be equalised at £157/week from 5th April (2017). This measure hasn't been loudly trumpeted in the media but had it been announced by (say) Gordon Brown, we'd have heard a lot of noise about a 'stealth tax' which will affect all employers. In effect, rather than raising the point at which employers start paying NI along with inflation from next year, the threshold only rises by £1/week. Early estimates suggest that this will cost every employer over £7 per week, per employee.

Salary Sacrifice Schemes

Schemes will be 'cut back' from April 2017 onwards. These aren't very common across the forecourt industry, but many other employers have found them a useful way of offering 'perks' to staff without the associated Benefit-in-Kind liability for the employee or NI liability for the employer. Essentially the employer arranges something on behalf of staff childcare is a common example and the employee pays the employer back by sacrificing part of their gross salary. Lower fees, lower tax and NI on both parties everyone happy. Until now.

Although socially 'beneficial' schemes (eg childcare, cycle-to-work, ultra-low-emission cars and employee additional pension contributions) will remain untouched, some of the other areas to which this practice has spread (gym memberships, luxury cars, etc) will now be phased-out between 2017 and 2021.

fuel duty

Remains unchanged at 57.95ppl (on both petrol and diesel) for the seventh successive year. Not really a surprise, since nobody was expecting any change, especially as RPI inflation is another cloud on the Chancellor's horizon. We've all seen retail fuel prices creeping up during the summer and autumn; those increases have been a significant component of the RPI changes over these months, and the government really wouldn't want to stoke those fires any more than they have to. The rest of the statement consisted of the usual pledges to increase spending in those areas where the government is currently feeling 'exposed' typically the NHS, but this time also the prison service as well as the now pretty-routine promises to tackle 'tax evasion'. Unfortunately whenever the government starts talking about that subject they have a tendency to mention small businesses and the self-employed in the next breath. Strange how they seem to ignore giant multinationals with £billions of sales in the UK but almost no corporation tax, or the hundreds (likely thousands) of already very wealthy UK individuals taking advantage of off-shore tax havens. No, easier to aim for the low-hanging fruit.

So expect HMRC to be paying even closer attention to your VAT returns or annual tax computations or rather you would, if they weren't simultaneously cutting back on the people working there...

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Weekly Fuel Prices 17 April 2017
RegionDieselLPGSuper ULUL
East120.7367.90128.72118.72
East Midlands119.95131.24118.34
London120.8753.90129.98119.12
North East119.40130.73117.21
North West120.01128.97118.13
Northern Ireland119.1063.50117.39
Scotland119.90126.33117.67
South East121.0958.50129.83119.18
South West120.38128.30118.45
Wales119.75125.03118.03
West Midlands120.3661.57130.37118.53
Yorkshire & Humber119.72129.97118.08

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