The Chancellor George Osborne delivered his Autumn Statement to Parliament. This sets out how the government will continue to secure the public finances, support families with their costs, help businesses to grow and equip young people with the skills they need to succeed. The Autumn Statement reinforced the government commitment to the long-term economic plan as it set out in 2010.
Economic Growth The economy is growing much faster than predicted. As a result, borrowing will be lower. By setting out an Autumn Statement that focuses on the continuing need to reduce spending, the government is reinforcing its commitment to tackling the deficit and help get the public finances back in to balance. With the deficit and debt still at unsustainable levels, deviating from that plan now would be the biggest risk to recovery.
Our Review Our review of the The Autumn Statement sets out the key factors that affect small business and individuals.
Supporting families To support families with the cost of living, the Chancellor announced in his Autumn Statement that the government is:
- Freezing fuel duty for the remainder of this Parliament, saving the average motorist around £11 when they fill up their tank
- Introducing a married couples tax allowance. This will benefit eligible couples by up to £200 and is transferable between spouses
- Introducing reforms to save the average energy bill payer £50, as well as
Business Growth In order to help businesses to grow the following was announced:
- Introducing a cap on the Retail Prices Index (RPI) increase in business rates in England to 2% in 2014-15
- Introducing a £1,000 business rates discount to help the high street to grow
- Doubling the Small Business Rate Relief for a further 12 months from 1 April 2014.
- Abolishing National Insurance contributions for under-21s earning below £813 per week. This will mak it cheaper for businesses to employ young people
- Confirmation that they would not be increasing the lower rate of Corporation Tax. Having a lower rates increases productivity and encourages business.
In order to ensure young people have the skills they need the Chancellor set out that that the government will remove the cap on university places so more people can go into higher education – it is estimated this will allow 60,000 more young people to go to university every year. They intend to provide an extra £40 million to increase the number of people starting higher apprenticeships by 20,000.
Anyone aged 18 to 21 claiming benefits without basic English or Maths will be required to undertake training from day one or lose their entitlement. People unemployed for more than six months to be forced to start a traineeship, take work experience or do a community work placement or risk losing benefits.
Tax avoidance clampdown They are aiming to clamp down further on tax evasion, avoidance and aggressive tax planning. One of the key factors is a new information disclosure and penalty regime for high risk promoters of avoidance schemes will be introduced. Objective criteria for identifying high risk promoters and a higher standard of reasonable excuse and reasonable care that will then apply to them will also be introduced. Clients of these promoters will also have certain obligations including identifying themselves to HMRC. You will be please to know PAH Accounting do not use high risk avoidance schemes!
Charities Legislation will be introduced in Finance Bill 2014 to prevent a charity from being entitled to claim charity tax reliefs if one of the main purposes of establishing the charity is tax avoidance. The definition of a charity for tax purposes will be amended to exclude such charities.
FSB The Federation of small businesses have provided some very useful commentary on the budget. Check out their reaction here