The autumn statement is almost a 6 month budget now and there were a few changes which are of interest to business owners
Increase in 100% allowances for capital expenditure
- Annual Investment Allowance increases from £25k to £250k from 1 January
- Any capital expenditure up to that value will benefit from a 100% rather than 18% allowance per annum
- This higher level lasts for 2 years from 1 January
- Delay any large capital purchases until 1 January if possible
From 2014 the main corporation tax rate reduces to 21%
- The rate was already being reduced but this accelerates the reduction
- The basic company rate remains at 20%
- This further reduces the effect of a marginal tax rates for associated companies which should encourage further small company activity
Personal allowances for 2013/14
- This will increase further toward the LibDem £10k target
- The increase will be £1335, giving £9,440pa tax free pay. This is £235 more than expected and will be a welcome boost to family incomes
- 40% allowances however are further reduced, but will get small increases over the next couple of years
For the family and small companies the increase in the annual investment allowance was a good decision to encourage investment after the reduction in the limit last year. Even the purchase of a van would use up most of a £25k allowance so this is a welcome change. This is only a brief summary of the changes most relevant to the clients we work with and you should seek professional advice if you have a specific query relevant to your personal circumstances before taking any further steps. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend – Accountants who “speak your language”