WARRINGTON based accountants Watkinson Black reflect on the Chancellor’s autumn statement.
THERE are some items published in the Autumn Statement that will need to be looked at separately due to their complexity.
These include measures to counter avoidance through partnerships, and another go at “IR35” legislation.
The other main features and announcements are:
ECONOMIC GROWTH
Forecast for this year is increased from 0.6% to 1.4%, with further revisions for the next 4 years.
GOVERNMENT BORROWING
The deficit has been revised down to 6.8% this year, and to 5.6% next year. This means essentially that the rate of increase in borrowing will be lower than previously forecast. Only by 2018-19 is there expected to be an actual fall in borrowing, ie a cash surplus.
BENEFITS AND PENSIONS
In April 2014, the state pension will rise by £2.95 a week.
The state pension age is to increase to 68 in the mid-2030s and to 69 in the late 2040s.
Overall welfare spending is to be capped. Also, anyone aged between 18 and 21 claiming benefits without basic English or Maths will be required to undertake training from day one or lose their entitlement. People unemployed for more than six months to be forced to start a traineeship, take work experience or do a community work placement or lose benefits.
TAXES AND ALLOWANCES
The personal income tax allowance will rise to £10,000 from April 2014, and then increase from 2015-16 by the Consumer Prices Index measure of inflation.
A married couples and civil partners tax break will start in April 2015, enabling people to transfer £1,000 of their income tax allowance to their partners, subject to limits.
Employer National Insurance contributions are to be scrapped on 1.5 million jobs for young people.
Business rates in England to be capped at 2% rather than linked to RPI inflation, with some retail premises in England to get a discount. Businesses moving into vacant high-street properties will have their rates cut by 50%.
From April 2015, capital gains tax will be imposed on future gains made by non-residents who sell residential property in the UK.
From 1 January 2014, the rate of the bank levy will rise to 0.156%, and is estimated to raise £2.7bn in 2014-15 and £2.9bn each year from 2015-16.
Stamp duty on shares purchased in exchange traded funds is to be abolished.
From April, a new tax relief is to be introduced for investment in social enterprises and new social impact bonds.
JOBS AND TRAINING
A boost in the government’s start-up loans scheme will aim to help 50,000 more people start their own businesses.
Export finance capacity available to support British businesses will be doubled to £50bn.
TRANSPORT
Petrol taxes stay frozen – a planned rise of 2p per litre for next year is to be scrapped.
Regulated train fares will rise in line with inflation, not at 1% above RPI as planned.
The tax disc is to be replaced with an electronic system.
EDUCATION AND FAMILIES
All pupils at state schools in England in Reception, Year 1 and Year 2 are to get free school lunches from next September, at an estimated cost of £600m a year.
An extra 30,000 places at English universities will be created in 2014-15. The following year, the current cap on student numbers will be abolished entirely.
An additional 20,000 apprenticeships are to be funded over the next two years.
HOUSING
The government hopes £1bn in loans will boost housing developments.
The housing revenue account’s borrowing limit is to rise by £300m.
Councils are to sell off the most expensive social housing and rundown urban housing estates to be regenerated, and workers who live in council houses are to be given priority on housing lists if they need to move home to find a job.
