The Chancellor delivered the Autumn Statement on 5 December 2012 and the following announcements were made that affect tax rates and allowances etc.

Corporation Tax

1. The main rate of corporation tax will be cut a further 1 % from April 2014 to 21%.

Business Tax (Companies and self employed)

1. There will be a temporary but significant increase in the Annual Investment Allowance  from £25,000 to £250,000 for two years to support new investment  in plant machinery by small and medium sized businesses. It would appear the increase applies for two years from 1 January 2013.

Please contact us before taking any action as transitional rules will apply on the change from £25,000 to £250,000 in the period 1 January 2013 - to 31 March 2013 for corporation tax and to 5  April 2013  for income tax.

Income Tax

1. A further  increase of £235 in the personal allowance for individuals in April 2013 taking it to £9,440 for the 2013/14 tax year.
2. The higher rate threshold will be increased by 1% rather than inflation in 2014-15 and 2015-16.
3. From 2014-15 there will be reductions to tax relief available on pension contributions. The lifetime allowance for pension contributions will be reduced from £1.5 million to £1.25 million and the annual allowance from £50,000 to £40,000.

Capital Gains Tax

1. The  annual exempt amount for capital gains will be increased by 1% each year in 2014-15 and 2015-16.

Inheritance Tax

1. Inheritance tax nil rate band will increase by 1% in 2015-16 from £325,000 to £329,000.

Other measures announced include the following:

1. Cancelling the 3.02 pence per litre fuel duty increase planned for 1  January 2013, deferred to 1 September 2013.
2. Working age tax benefits (excluding disability and carers benefits) will be up rated by 1 % for three years from April 2013.
3. State pension will increase by 2.5%.
4. New tax avoidance legislation will be introduced.
5. A Business bank will be created to provide finance and support for smaller businesses.

For full details see 2012 Autumn Statement

Please contact us  if you require further information and assistance.