U.K. Chancellor Osborne’s Main Measures in Autumn Statement
The following are the main measures announced by Chancellor of the Exchequer George Osborne in his autumn statement today.
The personal tax-free allowance will rise by 235 pounds ($378) to 9,440 pounds in April 2013. The point at which people start paying the higher 40 percent rate of income tax will rise by 1 percent to 41,865 pounds in April 2014 and to 42,285 pounds in April 2015. Increasing it by less than inflation will raise an extra 295 million pounds in the first year and 875 million pounds in the second.
PENSIONS TAX RELIEF
The government will save 1 billion pounds by reducing the tax-free amount people can put into their pension funds to 40,000 pounds a year from 50,000 pounds. The new cap, to take effect from April 2014, will come alongside lowering the lifetime cap for tax-free contributions to 1.25 million pounds.
The main rate of corporation tax, a levy on company profits, will fall in April 2014 by a further 1 percentage point to 21 percent. The measure will cost the Treasury 415 million pounds in 2014-15.
A levy on bank balance sheets is raised to 0.130 percent from January to ensure banks do not benefit from the cut in corporation tax. The increase means the levy will generate 515 million pounds more for the Treasury than previously estimated next year.
An extra 5.5 billion pounds of capital spending has been announced for the period up to 2015, funded by cuts to government running costs. It goes mainly to school- building and transport projects.
Most working-age benefits will rise by 1 percent, rather than inflation, for three years from April. That will save 1.4 billion pounds in 2014-15.
A decision to help motorists by canceling an increase in fuel duty that was due to take effect in January will cost the Treasury 1.6 billion pounds in the next fiscal year.
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