In his 2012 Autumn Statement, Chancellor of the Exchequer George Osborne announced changes to key tax and benefits rates. We round up the main announcements.
Personal tax changes
- The personal tax allowance is to rise by £235 to £9,440 next year, taking more people out of tax altogether. However, the higher rate tax threshold will only be increased by 1% in 2014/15 and 2015/16, rather than by inflation. The new 40% threshold will be £41,865 in 2014/15.
- There will also be a 1% increase in the capital gains tax exempt amount, taking it up to £11,100 in 2014/15.
- The inheritance tax (IHT) nil-rate band has been frozen at £325,000 since 2009, but will increase by 1% in 2015/16 to £329,000.
- The tax-free Isa limit will be increased to £11,520. There will also be a consultation to broaden the list of investments that can be held within a stocks and shares Isa, including smaller company shares traded on the Alternative Investment Market (AIM).
- Corporation tax will be cut by 1% from 2014, down to 21%.
For more detail, read our full guide to tax changes announced in the Autumn Statement.
The 3p per litre price rise on fuel planned for next January has now been cancelled. The 2013-14 increase will be deferred to September 2013.
For more detail, read our full guide to fuel tax changes announced in the Autumn Statement.
Most state benefits will rise by a maximum of 1% a year for three years from April 2013 – that’s below the expected rate of inflation. This cap will not apply to disability and carers benefits, or to pensioner benefits.
For more detail, read our full guide to benefits changes announced in the Autumn Statement.
The basic state pension will increase by 2.5% next year. For those pensioners who are in pension drawdown, the Chancellor announced an increase in the capped drawdown limit from 100% to 120%.
From the 2014/15 tax year, the lifetime allowance on pension contribution relief will be reduced from £1.5m to £1.25m. The amount you can pay into a pension fund each year and get tax relief will be reduced from £50,000 to £40,000. This is expected to bring in an extra £1bn in tax.
For more detail, read our full guide to pension changes announced in the Autumn Statement.