Five things every business needs to know about the Autumn Statement
Last updated at 17:07, Wednesday, 05 December 2012
There were some positive measures announced by the Chancellor in his Autumn Statement on 5 December, and some not so positive.
1.Corporation Tax rates
The main rate of corporation tax payable by companies will fall to 21% from 1 April 2014 (it was previously announced that it would fall to 22%). The small profits rate remains at 20%. Therefore, there will be only a 1% turn between the two rates and the impact of associated companies and the effective rate of corporation tax for companies within the margin will
become negligible. We expect that a single rate of 20% is the ultimate aim.
2. Capital Allowances
The annual investment allowance, being the amount a business can spend on plant and machinery to obtain 100% relief in the year of expenditure will increase ten-fold from 1 January 2013 for two years. This rate was only recently reduced from £100,000 to £25,000 and the large increase is welcome news to encourage capital expenditure. Many businesses would be advised to delay capital expenditure until 1 January 2013.
3.Simpler Income Tax for Smaller Unincorporated Businesses
This will be introduced from April 2013 to allow eligible self employed individuals and partnerships to calculate their profits on the basis of the cash that passes through their business. They will generally not have to distinguish between revenue and capital expenditure. Furthermore, all unincorporated businesses will be able to choose to deduct certain expenses on a flat rate basis.
4. Pensions Tax Relief
From April 2014 the annual allowance for pensions tax relief is to decrease from £50,000 to £40,000. The lifetime allowance is to decrease from £1.5million to £1.25million. These figures include any contributions made by the employer.
5.Fuel duty increase scrapped
The forthcoming 3p increase due in January has been scrapped. The planned increase for April 2013 has been delayed until September.
Nigel Holmes, Director – Corporate Tax, Armstrong Watson
For more information contact Nigel Holmes by emailing email@example.com or call 01228 690200
First published at 17:03, Wednesday, 05 December 2012
Published by http://www.in-cumbria.com
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