Chancellor of the Exchequer, George Osborne will deliver his second Autumn Statement on Wednesday 5th December 2012 at 12:30pm.
The Autumn Statement provides an update on the Government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR). The OBR will publish its latest report on the UK’s economic and fiscal outlook- including its latest revised estimates for UK economic growth- on the same day.
Last year’s Autumn Statement continued to build on the Government’s momentum to support small business owners. Investment in small businesses was encouraged via the National Loan Guarantee Scheme and the Seed Enterprise Investment Scheme.
The economic backdrop
Although the UK has technically recovered from its double-dip recession, economists are of the opinion that this was the result of "Olympics fever", and we are likely to see the UK return to recession. The outlook therefore remains bleak.
Autumn Statement 2012 Predictions
- Many self employed people operate below the VAT registration threshold and therefore are not VAT registered. As a result, the current rate of standard VAT of 20% is pushing up their expenses and putting increasing pressure on their cashflow. At this stage, unfortunately we think it’s unlikely we will see any reduction to the standard rate of VAT.
- It is likely that we will hear more about the “business bank” designed to specifically lend more money to small and medium sized businesses.
- There is speculation that we may also see a fuel duty freeze again, which would be a great help to small businesses owners running business vans and cars.
- There have been many rumours that the council tax system may be revamped, including talk of a so-called "mansion tax". But many have now ruled-out mansion tax, amidst concerns expressed by the Prime Minister that it might alienate traditional Tory voters.
- There are also calls from the Construction and Leisure and Tourism industries for the government to do more to rejuvenate these sectors that have particularly suffered during the recession.
- In his 2010 emergency Budget, Osborne cut the maximum annual pension contribution exempt from tax from £255,000 to £50,000. This year's Autumn Statement is expected to see the maximum contribution dropped to £40,000, which would bring in about £600m.
But speculation aside, it is clear that the Chancellor will need to announce growth strategies to help UK businesses flourish once more.
We will continue to update this page in the run-up to the Autumn Statement though as more news beaks. So bookmark this page and please check back soon.
All the latest coverage
Stay up-to-date with our live coverage of the Autumn Statement 2012 on 5th December, by following us on Twitter @TaxAssistUK.
We will publish our summary of how Autumn Statement 2012 affects your small business on our website here.
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By Jo Nockels