By Lyndsey Hall
Osborne wants to create a ‘Northern Powerhouse’. A new sovereign wealth fund, backed by revenue from the shale gas sector, will be set up by the coalition, to ensure that the “resources of the North are used to invest in the future of the North”. Billions of pounds will also be invested in transport links, including roads and rail improvements, as well as the new HS3. He also promised to invest £250m in a new Sir Henry Royce Institute in Manchester, with branches in Leeds, Sheffield and Liverpool, supporting the sciences throughout the North of England.
But, what about the rest of the country? In case you missed the Chancellor’s announcements on December 3rd, here is a summary of the key points in his Autumn Statement:
Business
- Business rates to be reviewed
- Small Business rate relief doubled for another year
- £45m made available to support exporters
- National Insurance on young apprentices (under 25) abolished
- £400m of backing for the British Business Bank
- £500m of new bank lending to SMEs (Enterprise Finance Guarantee Scheme)
- Funding for Lending (FLS) for small and medium-sized enterprises extended one year until January 2016
- R&D Tax credits increased for SMEs to 230% from 225%
Tax
- Air Passenger Duty scrapped for under 12s from 1st May 2015, and under 16s the following year
- Personal Tax allowance increased to £10,600 from April
- Higher rate income tax threshold to rise to £42,385 in 2015
- VAT paid by hospices and search and rescue organisations to be refunded
- Libor fines to support Gurkhas and other service veterans and their families
- New diverted profit (“Google”) tax of 25% on profits generated by multinationals intended to be moved out of the UK
- Fuel Duty to be frozen
Home Buyers
- Stamp Duty restructured from midnight 3rd December 2014 – rates now apply only to the part of the property price that falls into each band, i.e.:
- 0% on the first £125,000
- 2% on the portion between £125,000 and £250,000
- 5% up to £925,000
- 10% up to £1.5m
- 12% on any portion above that
Health & Welfare
- Employment Allowance worth £2,000 for carers
- £1.2bn from bank foreign exchange manipulation fines to go to GP services
- £2bn extra per year to go to the NHS until 2020
- Welfare spending to be £1bn less than forecast in March
- Migrants to lose unemployment benefits if they have “no prospect” of work after 6 weeks
- 2 year freeze in working-age benefits
Education
- £10,000 loans for postgraduate students studying Masters degrees
- New £250m Sir Henry Royce Institute in Manchester, Sheffield, Leeds and Liverpool
Savings & Pensions
- Partners to inherit their spouse’s ISA tax free upon their death
- ISA threshold to increase to £15,240 in April
- Complete public service pension reforms, saving £1.3bn per year
Public Borrowing
- Deficit half what it was in 2010
- Borrowing set to fall to £91.3bn in 2014-15 from £97.5bn in 2013-14
- Deficit projected to fall to:
- £75.9bn in 2015-16
- £40.9bn in 2016-17
- £14.5bn in 2017-18
- Before reaching a £4bn surplus in 2018-19
- £23bn surplus in 2019-20
- World War One debt to be repaid
For a more detailed look at Osborne’s Autumn Statement, take a look at the full official documents.
What are your thoughts on the Chancellor’s announcements? Which changes will have the biggest effect on you and your business? Let us know in the Comments or on Facebook or Twitter @KnowlesWarwick.
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