Was this the Autumn Statement of discontent or are we all in it together? The Chancellor had a difficult job having missed both debt and borrowing targets but feels the economy is healing.
Against a backdrop of a shrinking economy the Chancellor gave a clear message of support for businesses in his Autumn Statement with a whopping increase in the annual investment capital allowance from £25,000 to £250,000 for 2 years and a welcome further reduction in Corporation tax to 21% by 2014.
The temporary doubling of the small business rates relief until 2014 is welcome news for those businesses that occupy one property with rates of £12,000 or less. Small businesses can also expect a simpler income tax from April 2013 with draft legislation expected in December.
As predicted, pension allowances were a key agenda point this Autumn Statement. High earners are faced with cuts to pension lifetime allowance from £1.5m to £1.25m and the annual allowance eligible for tax relief is falling from £50,000 to £40,000 from 2014/15. This will have an impact and it also sends out a worrying message these may be reduced even further in the future.
Tax avoidance still remains the hot topic. The Chancellor continues to clamp down on tax dodgers with a package of new measures to combat tax avoidance and evasion providing additional resources for HMRC.
The Chancellor also looked at measures to help lower income earners by increasing the amount they can earn before tax to £9,440 next year. This was countered with a reduction in the higher rate income threshold to £32,010 from 2013/14.
In a bleak Autumn Statement, the Chancellor sweetened the pill by scrapping the 3p in the litre petrol rise but had to admit the squeeze is still on until 2018 as he admits he missed the target for debt – proving George Osborne is only human after all.
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