As expected, the Office for Budget Responsibility (OBR) downgraded its forecast for growth for the year 2012. The OBR believes that the UK economy will shrink by 0.1 per cent in 2012, compared with its Budget 2012 forecast of 0.8 per cent growth.
Against this challenging backdrop, the Chancellor's 2012 Autumn Statement outlined a range of measures aimed at making the savings needed to protect the economy and invest in programmes for growth.
Significant announcements included the details of a new £1 billion state-backed Business Bank to improve access to finance for small businesses. There will be an increase in the personal income tax allowance to £9,440 from April 2013 and the main rate of corporation will be cut to 21 per cent from April 2014. The planned January 2013 3 pence rise in fuel duty has been scrapped and the annual pension contribution allowance will decrease from £50,000 to £40,000 in 2014.
Whitehall budgets will be cut by one per cent in 2013 and two per cent in 2014, generating an intended £5.5 billion for investment in infrastructure. However, HM Revenue & Customs will be given an extra £77 million to tackle tax avoidance and evasion by companies and wealthy individuals.
This report provides a concise summary of the announcements made in the Autumn Statement. Please contact us to discuss measures that may be relevant to you or your business.