The Chancellor ‘s Autumn Statement was, as expected, a fairly gloomy affair. Whilst observers were pleased to see the Office for Budget Responsibility still predicting growth (even if just 0.7%) next year; the depth to which we are dependant on Europe and the rest of the world was brought home in no uncertain terms.
From a tax and business planning point of view the statement has brought up a few noteworthy items. Some of these we will explore in more depth in the forthcoming weeks but in summary they are:
• Action to stop large firms from using complex asset-backed pension funding arrangements which meant firms being able to claim double tax relief
• The announcement of two further Enterprise Zones in Humber and Lancashire
• Capital allowances of 100% to encourage businesses into the Enterprise Zones in Liverpool. Sheffield, the Tees Valley, Humber and the Black Country as well as the North Eastern enterprise zone
• The introduction of an “above the line” research and development tax credit in 2013 for larger businesses
• Confirmation that the Corporate tax rate will fall to 25% from April
• New rules on taxation of foreign profits to encourage multinationals to come to the UK
• The end of low value consignment relief for companies in the Channel Islands
• Extending the Enterprise Investment scheme to help new start up businesses – so from April 2012 anyone investing up to £100,000 in a qualifying new business will receive tax relief of 50% regardless of their actual tax rate
• For those investing in a qualifying start up business in 2012 for one year only capital gains tax will be waived on that investment
From a general business perspective these more substantial measures are being implemented alongside more general measures such as:
• Changing TUPE, redundancy and health & safety regulations
• Encouraging businesses to take on young employees or apprentices
• Help with grants and loans for business
• Mobilising savings in pension schemes to help to pay for infrastructure projects
• Subsidising train fare increases
• Cancelling the fuel duty increase planned for January and cutting next August’s increase to 3p.
• Extending business rate relief
As tax mitigation specialists Newshams are able to give advice on how these new measures may affect a tax planning strategy.
Contact us now on 020 7470 8820 and ask to speak to a tax adviser about the potential tax implications of the Chancellor’s speech or e-mail us at firstname.lastname@example.org and we’ll get straight back to you.
30 November 2011