The Autumn Statement didn’t contain any headline-grabbing concessions for business owners – and it wasn’t expected to. However, there were some interesting announcements made, including a shake-up of the business rates regime. Here, we summarise the main points from the Chancellor’s speech on Wednesday.
- The UK economy is expected to grow by 3% in 2014, and by 2.4% next year.
- Inflation has fallen to 1.5% in 2014, and is expected to fall still further – to 1.2% in 2015.
- The Government has failed to meet its borrowing targets. Although the deficit (the difference between Government spending and income) has halved since the Coalition came to power, the total amount of national debt has doubled over the past 5 years. The deficit is expected to fall each year until 2018-19, when a surplus has been predicted.
No changes have been made to business taxes (Corporation Tax, VAT).
Good news for the smallest firms – the Small Business Rate Relief concession has been extended for another year, until April 2016. If the rateable value of your premises is £6,000 or less, you’ll continue to pay no rates at all. Between £6,000 and £12,000, you’ll pay a proportion of the full rates on a sliding scale between 0% and 100%.
The Government has also committed to a formal review of the business rates regime, but the findings aren’t expected to be published until the 2016 Budget. The current way rateable values are calculated are thought by many to be antiquated. This is because rates are calculated according to the size of the premises, which is no longer fair – especially in the internet age, when the size of a workspace doesn’t necessarily correspond to the amount of money the business makes.
Further Business Measures
- The Chancellor has promised £500m in new bank lending for smaller firms (via the Enterprise Finance Guarantee Scheme), and Enterprise Capital Funds will receive a further £400m injection. Both schemes will be administered by the British Business Bank, which was created last year.
- The Funding for Lending scheme has been extended by another year.
- £45m more to promote exports.
- Increased R&D tax credits.
- Businesses will no longer have to pay National Insurance Contributions on the wages paid to apprentices under 25.
- The Government is to investigate ‘umbrella companies’ as part of its ongoing anti-tax avoidance drive.
- Large companies who move their UK earnings abroad for tax purposes, will be landed with a 25% tax charge of these proits.
- The way stamp duty (SDLT) is calculated has been overhauled, so you will pay less on any house purchases worth £937,000 or less. Stamp duty is now only paid on the proportion of the property value which falls within each tax band. This will result in a saving of £4,500 on a £275,000 house purchase, for example.
- Fuel duty has been frozen.
- The ISA savings threshold will rise from £15,000 to £15,240 from April 2015.
- The personal income tax allowance will rise to £10,600 from April 2015.
- The higher rate (40%) income tax band threshold will rise to £42,385 from April 2015.
For the fine-print, and documentation, visit GOV.UK.