Autumn Statement 2012 – What will the budget mean for your business?
The 2012 Autumn Statement was more like a spring Budget than its recent predecessors – particularly in relation to the many tax announcements.
What effect will the Autumn Report have on your business?
The Chancellor made his statement against a background of disappointing economic growth and the near certainty that he will miss one of his key budgetary targets.
“Again, there are no easy ways to reduce the deficit – but from year to year, no one will pay a penny more in income tax.” George Osborne
The key tax changes include:
- The personal allowance for 2013/14 will be raised to £9,440.
- The 40% higher rate threshold will increase by 1% in both 2014/15 and 2015/16.
- The annual exempt amount for capital gains tax will increase by 1% for 2014/15 and again for 2015/16.
- As already announced, employee shareholders will have different employee rights from other employees in return for shares that are exempt from capital gains tax.
- The 2013/14 investment limit for ISAs will rise to £11,520, with the cash ISA limit correspondingly increasing to £5,760.
- There will be consultations on expanding the list of qualifying investments for stocks and shares ISAs to include shares listed on AIM.
- The inheritance tax nil rate band will rise by 1% in 2015/16 to £329,000.
- From 2014/15, the lifetime allowance for pension savings will be reduced from £1.5 million to £1.25 million and the annual allowance will be reduced from £50,000 to £40,000.
- The capped pension drawdown limit will be increased from 100% to 120% of the value of an equivalent annuity.
- The main rate of corporation tax, which is currently 24%, will be cut to 21% with effect from April 2014.
- The annual investment allowance limit for plant and machinery will increase from £25,000 to £250,000 for two years from 1 January 2013.
- The temporary doubling of the small business rate relief will be extended for a further year from 1 April 2013.
- A number of anti-avoidance measures were announced, including various enhancements to HMRC’s powers and resources.
The Chancellors’ Autumn Statement, though widely trailed, contained important announcements for businesses and individuals struggling to deal with the economic downturn.