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Autumn Statement 2012 – key points for businesses

December 5, 2012

The Chancellor delivered his Autumn Statement this lunchtime. Here are the main points of interest to small business owners:

  • The economic growth forecast for the current year has been revised down from 0.8% at the last Budget to -0.1% today.
  • The predicted growth figures for 2013 and 2014 are 1.2% and 2% respectively, although forecast figures are almost always downgraded subsequently as optimism gives way to reality.
  • From 2014, the lifetime allowance for pension contributions will be cut from £1.5m to £1.25m, and the annual tax-free allowance slashed from £50,000 to £40,000.
  • The main rate of Corporation Tax, which has already been reduced significantly since the Coalition came to power, will be cut by one further percentage point to 21% from April 2014.
  • The basic rate Income Tax threshold will increase to £9,440 from April 2013.
  • The higher rate Income Tax threshold will rise to £41,865 in 2014/15, and £42,285 in 2015/16 – at 1% each year, these rises are far below the rate of inflation.
  • The current Inheritance Tax threshold of £325,000 will be increased by 1% from next year.
  • £1bn of extra capital has been promised for the new Business Bank.
  • There will be a temporary 2-year increase in the Annual Investment Allowance (AIA) from £25,000 to £250,0000.
  • UK Export Finance will provide up to £1.5 billion in loans to help finance small firms’ exports.
  • Aggressive tax avoidance schemes are to be targeted further by HMRC, and tax loopholes will be closed.
  • Offshore tax evasion is also in the spotlight, with the creation of a dedicated HMRC unit.
  • The Government will extend the temporary doubling of Small Business Rate Relief for another 12 months from 1 April 2013.
  • The planned 3.02 pence per litre fuel duty increase that was planned for 1st January 2013 has been cancelled.

We will update this page with further points shortly. You can access the HM Treasury Autumn Statement summary here, and supporting documents here.