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Autumn Statement 2012

Chancellor George Osborne delivered his 2012 Autumn Statement in December, as the Office for Budget Responsibility said it expected the UK economy to contract by 0.1% in 2012. The Chancellor outlined a raft of measures designed to curtail public spending and kick-start growth.

Some of the key announcements for businesses were:

  • Corporation tax: the main rate of corporation tax will be reduced to 21% from April 2014.
  • Capital allowances: from 1 January 2013, the Annual Investment Allowance (AIA) for plant and machinery will increase ten-fold from £25,000 to £250,000 for two years.
  • Small Business Rate Relief: the temporary doubling of the Small Business Rate Relief scheme has been extended until April 2014.
  • Property rates: subject to state aid approval, an exemption from empty property rates will be available for 18 months on all newly-built commercial properties completed between 1 October 2013 and 30 September 2016.
  • Cash basis of accounting: the new cash basis for small, unincorporated businesses with receipts of up to £77,000 to calculate their tax will be introduced as planned from April 2013. The use of flat rates to calculate some expenses will also be introduced.
  • Employee share ownership: the Government will go ahead with proposals to provide shares to employees in return for giving up employment rights, as planned from 6 April 2013.
  • Company cars and vans: the car fuel benefit charge multiplier will increase from £20,200 to £21,100 in 2013/14. The van fuel benefit charge will increase from £550 to £564.
  • Support for exporters: the Government will set up a scheme to provide up to £1.5 billion of loans for the purchase of UK exports when there is no other suitable finance available.
  • Business Bank: the state-backed Business Bank will receive an extra £1 billion of capital to encourage lending to SMEs.
  • Business Growth Fund: the £2.5 billion Business Growth Fund is budgeting to substantially increase its level of investment to £200 million in 2013.
  • Start-up loans: the Government will provide £72 million of follow-on funding for start-up loans.

A vital part of our role is to make sure that you are keeping your tax liability to a minimum. Please do not hesitate to contact us if you would like to discuss any areas of tax planning.  

Download the full Power In Numbers Newsletter here.

Andy Miller, Partner, Sutton

Autumn Statement