Autumn Statement 2013…..What could it mean to you?

The Chancellor of the Exchequer delivered his Autumn Statement on Thursday 05 December 2013. Most people were expecting a rather bland statement, partly because it is still some 16 or so months away from the next General Election and partly because the UK’s financial resources are still stretched. George Osborne MP did however manage to offer a few surprises, especially towards the end of his speech, partly aimed at small business enterprises.

As with all Budgets and Autumn Statements, the ‘devil is in the detail’, and I have endeavoured to provide a brief outline to the Chancellor’s Autumn Budget Statement below. This is not an exhaustive list, but provides some of the main issues:

Personal Planning & Taxation

State Pension

A rise of £2.95 a week will be applied to the Basic State Pension in April 2014. However an increase to 68 of the State Pension Age will be applied in the middle of the 2030s and on to 69 in the latter part of the 2040s.

ISA Allowance 2014/2015

The current full ISA allowance of £11,520 will increase to £11,880 in the new tax year.

TAXES AND ALLOWANCES

• With reference to when you start paying Income Tax, the personal tax allowance will increase to £10,000 from April 2014 and be linked to the Consumer Price Index (CPI) thereafter.
• Due to start in the tax year 2015/2016 (from 06 April 2015) is a tax break for married couples and civil partners, which is likely to cost the Treasury about £700m pa, enables them to transfer £1,000 of income tax allowance to their spouse / civil partner.
• Capital gains tax (CGT) will be applied on future gains made by the sale of residential property in the UK by non-residents from April 2015.
• Free school lunches from September 2014 will be made available to infant pupils (Reception, Year 1 and Year 2) at state schools in England, this will cost about £600m a year.
• Exchange Traded Funds (ETFs) which purchase shares will not have to pay Stamp Duty on the purchase.

Business & Charities

• Business rate increases will be capped at 2% instead of linking it to inflation (as measured by the RPI) in England and Wales. Re-occupation relief will see some retail premises in England receive discount (of 50%) on their business rates.
• New tax relief will be introduced for investment in social enterprises and new social impact bonds from April 2014. This may be of interest to Charities and alike.
• For approximately 1.5 million jobs for young people (under 21 years old), the Employer National Insurance contributions will be removed from April 2015.
• Over the next two years an extra 20,000 apprenticeships will be created.

In addition to these points, there was significant news on the UK economy.

ECONOMIC GROWTH

• This year the growth forecasts were revised from 0.6% to 1.4% (2013), for next year up from 1.8% to 2.4% (2014), and to 2.2% (2015), 2.6% (2016), 2.7% (2017) and 2.7% (2018).
• Support for British businesses of export finance capacity available increased to £50bn.
• Scheme with the aim of helping 50,000 more people start their own businesses via an increase in start-up loans.
• The Office for National Statistics has amended their figures for GDP in 2008/09 from a decline of 6.3% to a decline of 7.2%. This effectively wiped £112bn from the UK Economy.
• The “underlying deficit" in the UK was changed down to 6.8% for this year and 5.6% for next year.

Summary

No individual advice has been given in the course of this blog. This summary is not an extensive or exhaustive list of the Autumn Budget Statement. We hope that some of these highlights are of interest to your future financial planning.

If you would like to discuss any matter in the Autumn Statement with regards to your own individual situation and circumstances or any aspects of financial planning, both personal and business (SME), then please contact the team, either in Guildford or Woking.

Keith G Churchouse FPFS
Director
Financial Planner
Chapters Financial Limited

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.