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Autumn Statement 2012

The chancellor George Osborne began his speech with the words ‘the British economy is healing’, before describing the 2008/09 financial crisis as the ‘biggest economic crash of our life times’. He observed that deep-rooted problems continue to affect us all, both at home and overseas; but indicated that the Coalition Government remains committed to its deficit reduction plan.

What does this mean for you?

As an individual or business owner, the current state of the UK economy means that you may wish to proceed carefully. The onus is on care and consideration when it comes to everything from investing, to borrowing funds. There are also opportunities to be seized, but not without risk, it is vital to seek professional advice from your McLintocks contact.

From 6 April 2013, the basic personal allowance will increase to £9,440, which is £235 more than previously announced in the 2012 Budget. The total increase in the personal allowance is £1,335. This will benefit an estimated 24.4 million individuals and the rise of £1,335 is the largest ever cash increase.
It is projected that since 2011 the cumulative increases in the personal allowance will have taken 2.2 million out of paying any income tax whatsoever

Higher rate taxpayers will see increases in the higher rate threshold of one per cent for 2014/15 and 2015/16 to £41,865 and £42,285 respectively. This will be the first cash increase in the higher rate threshold this Parliament.

Corporation tax

The Government announced that the main rate of corporation tax will be reduced to 21 per cent from April 2014. This is an addition to the one per cent reduction already announced. As previously announced, the main rate of corporation tax will reduce to 23 per cent from 24 per cent on 1 April 2013, with the Small Profit rate remaining at 20 per cent.

Capital allowances

From 1 January 2013, the Annual Investment Allowance (AIA) will increase ten-fold from £25,000 to £250,000 for two years, in a measure principally designed to encourage and support investment by small- and medium sized businesses in plant and machinery.

Pension tax relief

With effect from the tax year 2014/15 there are changes to the annual allowance for pensions and the standard lifetime allowance.

The annual allowance

The annual allowance will be reduced from £50,000 to £40,000 for the tax year 2014/15. The annual allowance is the maximum amount of an individual’s annual pension contributions that attract tax relief.
You will be affected by the change if your total pension contributions made in ‘pension input periods’ that end in a tax year are greater
than the annual allowance plus any available unused annual allowance that you can carry forward from the three previous tax years. The approach to your contributions being tested against the annual allowance depends on the
type of your pension scheme. Your pension scheme administrator should advise you if your pension contributions in their scheme are more than the annual allowance.

Full details of the chancellor’s statement please download the pdf