Budget: autumn statement in brief
The Autumn Statement has just been delivered (on 5 December 2013) to parliament by the chancellor, George Osborne. This is a precursor to the March 2014 Budget. As in previous years, the Autumn Statement is an opportunity for the chancellor to soften the blow of upcoming fiscal policy and reveal the government’s thinking on the economic outlook.
Thankfully, this Autumn Statement didn’t reveal further changes to lifetime or annual pension limits, or rises in income tax. Instead, the chancellor focused on emphasising the improving economy and some help for small business – which should eventually filter down to dental practices. Reducing tax avoidance loopholes is to increasingly become a target of the chancellor and self-employed associates may come under scrutiny if they are deemed to be ‘employees in disguise’. Here is a summary of the main points from this morning's Autumn Statement.
Tax avoidance package to raise £9bn over next five years, with an increased focus on employees posing as the self-employed. It remains to be seen if associate dentists come under scrutiny? Non UK-residents to pay Capital Gains Tax on selling UK residential property branded as the ‘oligarch tax.’
Small business issues
Business rates ‘rate relief scheme’ extended for a further year. Cap on business rates for all at 2% in 2014. 12-monthly instalments now allowed. This translates into a tangible benefit for dental practices. Report published showing corporation tax cuts are helping business. Employer National Insurance abolished for employees under 21.
Basic state pension to rise again in April 2014, but the pension age to increase to 69 by late 2040s. Pressure on public sector pension schemes to follow the rising state pension age is likely to continue.
Rates and reliefs
ISA allowances set to increase from £11,520 to £11,880 in April 2014. A relatively small inflationary increase but one worth using. Fuel duty rise cancelled for 2014 – saving the average motorist £11 every time they fill their tank by 2015-16.
A married couples and civil partners transferable tax break proposed to start in April 2015.
Spending on NHS to be ring-fenced from general welfare cuts and caps.
More positive than previously thought. UK growth forecast for 2013 increased to 1.4% and to 2.4% for 2014. Eurozone growth prediction shrinks to 0.4% for 2013. Unemployment is predicted to fall to 7% by 2014. This is the Bank of England’s key measure to trigger interest rate rises. Public sector borrowing is down significantly more than forecast and a surplus is predicted for 2018/19.
Jeff Williamson is the lead accountant for PFM Townends, specialist dental accountants and part of the PFM Dental group. Visit www.pfmdental.co.uk for further details.