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.
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Andy Miller, Partner, Sutton