Award-winning South West-based chartered accountancy firm Milsted Langdon is advising businesses of measures in Chancellor George Osborne’s Autumn Statement which could benefit them.
Although he acknowledged that he would miss his own target for reducing the deficit, Mr Osborne promised that the government was still making progress, adding that there would be “no quick fixes” as the country struggles to recover from a long and deep recession.
Mr Osborne introduced a number of new measures designed to help small businesses grow and encourage new investment into the country, including a cut in Corporation Tax to 21% by April 2014.
Another significant, and unexpected, announcement was a ten-fold increase in the Annual Investment Allowance (AIA) from £25,000 to £250,000, starting from 1 January 2013.
Furthermore, it was announced that an extra £1 billion in capital would be pumped into the government’s planned business bank, which will focus on lending to SMEs.
The Chancellor also announced a 1% rise in the thresholds for Inheritance Tax and Capital Gains Tax, while the threshold for the 40% rate of income tax is to rise by 1% in 2014 and 2015, from £41,450 to £41,865 and then £42,285. The basic income tax threshold is also set to increase to £9,440 next year.
However, higher earners were hit with the news that the annual pension allowance will be cut from £50,000 to £40,000 in 2014/15, while the lifetime pension allowance will be reduced from £1.5 million to £1.25 million at the same time.
Jonathan Langdon, chairman and founding partner of Milsted Langdon, said: “In what remains a difficult economic climate, there are a number of measures in this year’s Autumn Statement that will come as good news to many.
“Of course, it is too early to say how this ‘mini-Budget’ will help the economic recovery, but we would be only too happy to help businesses make sense of what has been announced and how it will affect them.”