The Autumn Statement was given on Thursday 5 December by the Chancellor of the Exchequer. The statement is a means of updating MPs on the government’s taxation and spending plans – based on the economic projections provided by the Office for Budget Responsibility (OBR) – a body set up in 2010 to provide independent economic forecasts.
It is the second of the two most important economic statements that the Chancellor gives every year (the first being the Budget).
An overview of key announcements relevant to our industry is outlined below:
A 2% cap on business rate increases from April 2014.
Extension of the business rate relief scheme for a further year – to April 2015.
Retail premises with a rateable value of under £50,000 are to receive a business rate increase of £1000 per year for the next two years.
The government will introduce a 50% business rates relief scheme for 18 months for businesses that move into retail premises that have been empty for a year or more – eligible between 1 April 2014 and 31 March 2016.
ONE TO WATCH: The Government will publish ‘Small Business: GREAT Ambition’ in December 2013 to provide a clear statement of its offer to small businesses, bringing together a range of new activities across government that reflect its ongoing commitment to small business.
Government confirmed apprenticeship reform and a new system to route apprenticeship funding direct to employers.
The RMI voiced their concerns around the funding structure in their submission to the Chancellor ahead of the Autumn Statement, however no new announcement on funding reform was announced.
The government has also committed to:
– introduce a compulsory employer cash contribution for a significant proportion of the external training costs of an apprentice (excluding English and maths)
– aps on the maximum government contribution per apprentice
– withhold a proportion of the funding for a payment by results approach
ONE TO WATCH: The Government has pledged to consult on the technical details of the system in early 2014, and on the option of an alternative funding route for the smallest businesses. The RMI will be voicing the concerns of our members over funding reform over the course of this period.
National Insurance and Corporation Tax
Government reasserted their commitment to a competitive tax structure and forecasted the impact of current corporation tax cut plans over the period to 2016. They did not announce any further cuts to corporation tax.
The RMI have welcomed the news that Government plan to abolish Employer National Insurance contributions for employees under the age of 21.
The statutory maximum price of the MOT test for a car will be frozen at £54.85 until 2015.
The paper tax disc will be abolished, removing an administrative inconvenience for millions of motorists.
To bring down the high costs of fuel on motorways, new comparison road signs will be trialled which will show prices at different service stations along a route, making it easier for drivers to find the cheapest deal and encouraging competition on prices.
From 2014, whiplash cheats, whose fraudulent compensation claims have driven up average motor insurance premiums, will be scrutinised by new independent medical panels. This will ensure that only evidence from accredited professionals can be considered and will mean people can no longer profit from exaggerated or fraudulent compensation claims.