Last Thursday, the Chancellor George Osborne delivered his Autumn Statement to the House of Commons. The Statement provides an update on the government’s plans for the economy, with a focus on taxation and spending.
It was announced that Britain’s economic plan is working, but the job is not yet done. ‘Responsible recovery’ by sticking to the austerity plan was deemed the way forward.
Key measures/forecasts outlined:
- Capped business rate increases at 2% in 2014
- Doubling of the Small Business Rate relief to 100% for qualifying business was extended by a year until April 2015
- Business rate discounts of £1,000 for two years for small retail businesses and a temporary reoccupation relief for empty retail premises – to help improve shop vacancy rates in town centres
- Break for employers from National Insurance Contributions when employing young workers (under 21 years)
- Export finance capacity for UK businesses will be doubled to £50 million.
- Office for Budget Responsibility (OBR) forecasts for growth in 2013 upgraded from 0.6% to 1.4%, for 2014 1.8% to 2.4%
- Forecast for growth for the 4 years from 2015 – 2.2%, 2.6%, 2.7% and 2.7%
- Government borrowing is £9 billion less than expected this year, at £111 billion
- Borrowing to fall to £96 billion next year, £79 billion in 2014, £51 billion in 20152 and £23 billion thereafter
- Employment will rise by 400,000 in 2013. OBR forecasts 7.6% jobless rate in 2013, falling to 7% in 2015 and 5.6% by 2018
- Job seekers aged 18 to 21 without basic maths or English will be required to undertake training
- An additional 300,000 student places will be offered next year, with the cap on student numbers abolished in 2015
- Green levies on energy bills rolled back by average £50 per household
- New loans worth £1 billion to unblock large housing developments in Manchester and Leeds.
- Married couples will be able to transfer £1,000 of their personal allowance from April 2015, but only if neither is a higher rate tax payer
- UK capital gains charge on the sale of UK residential property by non-residents with effect from April 2015, in respect of increases in value after that date
- In respect of UK residents, the period that is disregarded when selling a second home when it comes to calculating a CGT bill has been cut from 3 years to 18 months
- Fuel duties frozen for the rest of this parliament
- Train fares will increase in line with inflation only – not by the previously announced inflation plus 1%
- Paper tax disc will be replaced by a new digital system from October 2014
- Cap on welfare spending to be set in 2014 and start in 2015 – but will exclude the state pension and job seekers allowance
- Funding for Jobcentres to provide 16 or 17 year olds in finding apprenticeships or traineeships
- State pension age is set to increase to 68 from the mid 2030’s and then 69 from the late 2040’s
- State pension to rise by £2.95 per week from April
- New priority right to move for social tenants who need to relocate for a job
- Free school meals for infants
The capping of business rates and the extension of business rate relief will come as welcome news to business owners, although some claim that the announcements do not go far enough. The abolition of National Insurance contributions for employees under 21 is another positive step for businesses and a clear move to encourage the employment of staff in this age group.
For more information on any of the announcements and to find out how they might affect your business, our team of business solicitors would be happy to provide advice. You can get in contact with us here.