The 2012 Autumn Statement was more like a spring Budget than its recent predecessors – particularly in relation to the many tax announcements. The Chancellor made his statement against a background of disappointing economic growth and the near certainty that he will miss one of his key budgetary targets.
The key tax changes include:
- The personal allowance for 2013/14 will be raised to £9,440.
- The 40% higher rate threshold will increase by 1% in both 2014/15 and 2015/16.
- The annual exempt amount for capital gains tax will increase by 1% for 2014/15 and again for 2015/16.
- As already announced, employee shareholders will have different employee rights from other employees in return for shares that are exempt from capital gains tax.
- The 2013/14 investment limit for ISAs will rise to £11,520, with the cash ISA limit correspondingly increasing to £5,760.
- There will be consultations on expanding the list of qualifying investments for stocks and shares ISAs to include shares listed on AIM.
- The inheritance tax nil rate band will rise by 1% in 2015/16 to £329,000.
- From 2014/15, the lifetime allowance for pension savings will be reduced from £1.5 million to £1.25 million and the annual allowance will be reduced from £50,000 to £40,000.
- The capped pension drawdown limit will be increased from 100% to 120% of the value of an equivalent annuity.
- The main rate of corporation tax, which is currently 24%, will be cut to 21% with effect from April 2014.
- The annual investment allowance limit for plant and machinery will increase from £25,000 to £250,000 for two years from 1 January 2013.
- The temporary doubling of the small business rate relief will be extended for a further year from 1 April 2013.
- A number of anti-avoidance measures were announced, including various enhancements to HMRC’s powers and resources.