Earlier today George Osborne, Chancellor of the Exchequer, delivered his Autumn Statement to Parliament.
Following are a summary of the key points affecting both SME business owners and individuals, taken from today’s statement.
Personal Allowance Increase
Starting from April 2014, the income tax threshold will be increased from £9,440 to £10,000. It’s predicted that by this date, 2.7 million individuals across the country will have benefited from the increases in the income tax-free threshold, with a typical basic rate taxpayer paying £705 less income tax per year than they would have done in 2010-11.
Transferable Tax Allowance for Married Couples
Effective from 2015-16, married couples and civil partners will be able to transfer £1,000 of their income tax personal allowance to their spouse, so long as neither spouse is paying the higher rate of tax.
This is most likely to benefit couples where one spouse is not using their full personal allowance – allowing the couple to pay less tax together (worth up to £200 in 2015-16).
The maximum investment allowance into ISAs is set to grow in line with inflation for the year 2014-15, with investors being able to put aside £11,880 into ISAs, exactly half of which (£5,940) may be saved in a cash ISA, with the remainder being placed into a stocks and shares ISA.
Encouraging SME Growth
With the aim to help small to medium-sized businesses to grow and thus be able to create jobs, the government is to introduce a cap on the Retail Prices Index (RPI) increase in business rates in England to 2% in 2014-15, alongside introducing a £1,000 business rates discount to help small shops, pubs, cafes and restaurants located on high streets across the county.
The government is also going to double the Small Business Rate Relief for another twelve months from 1 April 2014 in order to help 540,000 small firms. In a similar vein, SMEs will also receive a 50% relief for taking on empty retail properties.
Supporting Small Business
In order to give small businesses greater confidence and certainty going forward, and to make the tax system ” simpler, clearer and more efficient,” the government has published a new corporate report alongside the Autumn Statement called Supporting Small Business (Making Tax Easier, Quicker and Simpler), available to download from today. They also announced they will publish another corporate report, titled Small Business: GREAT Ambition later this month.
It was also noted that the popular startup loans scheme Seed Enterprise Investment Scheme (SEIS), which has already injected £82 million into UK startups, will be expanded in the coming year and is predicted to serve 50,000 extra people.
NICs Abolished for Employees Under 21
To support youth employment (currently standing at 24% for 18 to 20-year olds) the government is to abolish national insurance contributions (NICs) for employees under 21, with the view of making it cheaper for businesses to employ them.
NICs will be completely abolished for those under 21 earning under £813 a week from April 2015, a measure that will apply to both new and existing employees. It’s also been noted that no individual’s state pension entitlement will be affected as a result. It’s estimated that under this measure, nearly 1.5 million under-21 year olds will rise above employer NICs completely, with an average saving of £355 per employee to employers willing to support Britain’s youths.
How the Autumn Statement Affects You
To speak with a professional regarding how measures put forward in the Autumn Statement affect you, or your business, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
This blog is a general summary. It should not replace professional advice tailored to your specific circumstances.