The Chancellor delivered his Autumn Statement on Wednesday 5 December. The following are the main areas which are relevant to small businesses and taxation:
Small Business Rates Relief
The 100% relief for small business rates has been extended by a further year to April 2014. The relief is available to businesses with 1 property with a rateable value less than £12,000. If you think you may qualify but don’t currently receive the relief, please contact your rates provider.
The basic personal allowance for 2013/14 will be increased to £9,440 (2012/13: £8,105). The basic rate limit will be decreased, and the higher rate threshold (HRT – the sum of the personal allowance and the basic rate limit) will be £41,450 for 2013/14 (2012/13: £42,475).
Corporation Tax Rate
You may have seen that the rate of corporation tax is dropping, from 23% to 21% from 1 April 2014. This is the main rate of corporation tax, which affects companies with profits in excess of £300,000. The small business rate of corporation tax is still 20%.
Annual Investment Allowance
The Annual Investment Allowance (AIA) is the amount of investment which businesses make in plant and machinery which qualify for 100% tax relief. With effect from 1 January 2013, the limit for annual expenditure is being increased from £25,000 to £250,000. This is an incentive to encourage investment by SME’s in equipment.
We believe on the whol that the 2012 Autumn Statement has been positive towards small business.