Autumn Statement 2013 – Key Points

Earlier today the Chancellor delivered the 2013 Autumn Statement here’s a summary of what we think were Mr Osborne’s most important points.

In terms of measures to help business, the Chancellor:

  • confirmed that he will continue with his plan to reduce the main rate of corporation tax to 20% by 2015
  • business rate increases to be capped at 2% in 2014
  • extended the doubling of the Small Business Rates Relief scheme to April 2015
  • provided business rates discounts of £1,000 per annum for two years for small retail businesses and introduced a temporary reoccupation relief for empty retail premises
  • didn’t say anything about the £250,000 Annual Investment Allowance which is due to end on 31 December 2014
  • froze fuel duties for the remainder of this parliament
  • introduced an exemption from employers’ NIC for young people aged under 21 and announced a reform of apprenticeship funding
  • brought in the previously heralded incentives to encourage the sale of businesses to genuine employee share ownership structures and allow tax free bonus payments from such entities of up to £3,600 per annum
  • announced that, following consultation over the summer into the way that loans to participators from close companies are taxed, he does not intend to make any immediate changes in this area.
  • introduced anti avoidance legislation with immediate effect to counter the tax benefits of having corporate members of partnerships and LLP’s
  • introduced some specific measures to counter certain contrived tax avoidance arrangements

 As regards personal tax:

  • the £10,000 personal allowance comes into effect in April 2014 as planned
  • married couples will be able to tarnsfer £1,000 of their personal allowance from April 2015, but only if neither is a higher rate tax payer
  • the state pension age is set to increase to 68 from the mid 2030’s and then 69 from the late 2040’s
  • the planned reduction in pension contribution annual limits from £50,000 to £40,000 and the lifetime limit reduction to £1.25m will take effect in April 2014 as planned
  • introduced a UK capital gains tax 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
  • tinkered with Principal Private Residence relief to reduce the exempt final period of ownership from 3 years to 18 months, thus slightly reducing the tax benefits from flipping residences
  • introduced a new Class 3A voluntary NIC contribution for pensioners wishing to top up their state pension entitlement
  • there were no changes to capital gains tax entrepreneurs’ relief or to inheritance tax
  • the introduction of the new Universal credit system will continue as planned

Other measures:

  • the proposed trust simplification measures that have been consulted on over the summer will be introduced in part in 2015, but further consultation is to take place on certain aspects
  • the heralded amendments to the Community Amateur Sports Club rules will take effect from April 2014

Jane Parry, Tax Partner.