The main tax changes are usually announced in the spring budget, with the autumn statement reserved for finance matters. However, we are told of some tax changes:
Next year the personal allowance will be £9,440.
Corporation tax main rate will be reduced by a further 1%. For a typical family company in Cornwall, this reduction will only help if your company profits exceed £300,000.
More helpfully, the annual investment allowance (AIA) will be increased from £25,000 to £250,000 from 1st January 2013. This means that, given the right timing, the whole cost of new equipment up to £250k can be set off against profits as a capital allowance in the year of purchase. Timing can be critical though, as the AIA is time-apportioned into accounting periods.
The small business rate relief scheme will be extended until April 2014. See here for details: https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief
Countering tax evasion
This week we had an HMRC enquiry because Mrs X had omitted from her tax return the savings interest from a joint account. (HMRC would have known, from the information it gets from the banks, that this related to a joint account.) In fact, Mr X had put it all in his tax return. Well spotted HMRC, quite correct of course. Net effect – no extra tax.
The Autumn Statement announced an increased budget (£77M) for HMRC to fight tax avoidance by wealthy individuals and multinationals. This might be a good thing, but it would be even better if HMRC also spent less effort on small businesses and individuals like our example this week, and instead re-assigned this effort in looking for bigger fish to fry.
More importantly for people in Cornwall, the single-lane stretch of the A30 on Bodmin Moor will – at last – be made into a dual carriageway. When the roadworks are completed, this will help the tourism and the economy of the county generally.