The Chancellor delivered his Autumn Statement today. Here, we have summarised the main points, as they relate to business owners.
There has been a significant upgrade in UK economic growth forecasts for the current, and future years.
Growth for 2013 has been upgraded from 0.6% to 1.4%, and for 2014 from 1.8% to 2.4%.
Despite growing optimism over the economy, the annual deficit (the amount the Government plans to borrow to balance the books) remains very high. This year, the annual deficit is likely to be £111bn, and is forecast to fall in subsequent years, even reaching a ‘small surplus’ by 2018/19.
Business Policy Changes
- Rises in business rates for England and Wales are to be limited to a 2% annual rise, rather than linked to RPI inflation.
- A new £1,000 business rates discount is to be introduced – aimed at high street firms.
- The doubling of Small Business Rate Relief will be extended from April 2014 for a further year.
- A business rate incentive will be offered to businesses that take on disused properties.
- Employers’ National Insurance Contributions are to be abolished for employees aged under 21 and earning £813/week or less.
- The ‘Start Up Loans’ scheme is going to be expanded significantly, with an additional £160m committed over the next 6 years.
- The Government will inject a further £250m for the British Business Bank’s new lending schemes.
- A significant increase in administrative and lending commitments to exporters.
- An additional £25m has been committed to supporting employee ownership in the businesses they work for.
- Further action is to be taken over tax avoidance and evasion, raising an extra £6.8bn over the forecast period.
- New legislation will be created to prevent ’employment intermediaries’ to use contrived contracts to disguise the employment status of workers. Taking effect from April 2014, this measure is expected to raise £400m.
Other Policy Changes
- In a pre-announced measure, the personal tax allowance will rise to £10,000 from April 2014.
- A new tax break for married couples (and those in civil partnerships) will start in April 2015. This will allow partners to transfer up to £1,000 of their personal tax allowance to their spouse, as long as neither is a higher-rate tax payer. This is worth up to £200 per couple.
- Fuel duty will be frozen for the remainder of the current parliament. The Chancellor said that under the Coalition, average petrol prices were 20p/litre lower than they would have been under Labour.
- The Government aims to save households an average £50 on their annual energy spend by “reducing the impact of government policies on energy bills”.
- Rises in average regulated rail fares will not exceed RPI during 2014.
- Non UK-Residents will have to pay capital gains on the disposal of property from 2015 (following a consultation period).
The official Autumn Statement page on GOV.UK contains a summary of today’s speech, together with the full accompanying documentation.