6 December 2012
Press ReleasesThames Valley and South Coast accountants James Cowper Kreston comment on George Osborne’s 2012 Autumn Statement.
The Chancellor’s Autumn Statement is beginning to sound more and more like a mini-Budget. Yet unlike George Osborne’s April Budget he managed to keep a few surprises under-wraps. Whether these ‘Christmas presents’ are wanted or not – well that is another question.
For businesses
Businesses of all sizes can take away from the Autumn Statement a little unexpected cheer.
Ian Miles, Partner, James Cowper Kreston explains: “The main rate of corporation tax is to fall to 21 per cent from April 2014 and there will be a ten-fold increase in the annual investment allowance in plant and machinery to £250,000 for two years from 1 January 2013. This, said the Chancellor, will cover 99 per cent of all businesses.”
“Oxford is set for a further windfall, with the city earmarked as one of just 12 to receive ultra-fast broadband. The city will also benefit from the additional £600m set aside for scientific research.”
“A temporary doubling of the Small Business Rate relief scheme will help over half a million small firms and 350,000 will pay no rates at all.”
Ian continues: “Those businesses who rely on motor vehicles will also cheer the scrapping of the planning three pence increase in fuel duty scheduled for January.”
For individuals in work
The Chancellor has repeatedly said that he wishes to help those in work, rather than rewarding those out of work – and he was true to his word.
Ian said: “The income tax threshold increases to £9,440 and the threshold for the 40 per cent rate increases by one per cent in April 2014 and a further 1 per cent in April 2015. This is more than was expected.
“With a new ISA for stocks and shares, the scrapping of a proposed property tax and the dropping of the planned three pence increase in fuel duty scheduled for January, families in the South East are likely to feel just a little bit better off.”
Ian adds: “Those who make significant contributions to their pensions, the cap will be reduced from £50,000 to £40,000 a year from April 2014 - so you might want to make contributions in the next two tax years.”
For individuals out of work
The picture for those on benefits and out of work is however not so great.
“Pensioners will no doubt welcome the 2.5 per cent increase in the state pension, but there is little else to cheer,” says Ian. “Working age benefits and child benefit will increase by just one per cent – a drop in real terms.
“Welfare changes will, says the Chancellor, save £3.7bn by 2016 – and that is going to hurt families that are already finding things tough.”
To view the pdf version of the Autumn Statement 2012, please click here.
Ian Miles, Partner, James Cowper Kreston LLP, Tel +44 (0)1491 848500 or email
