Chancellor's Autumn Statement

The Chancellor of the Exchequer presented his Autumn Statement on 29 November 2011 in which he updated MPs on the state of the economy and the government’s future plans to combat the continuing financial problems facing the country. The economic growth forecasts for 2011 and 2012 have been revised downwards acknowledging that the recovery is slower than previously anticipated. The main points affecting small and medium sized businesses are as follows:

Capital gains tax
The annual exempt amount for capital gains tax will be frozen at £10,600 for 2012-13.

Corporation tax
The main rate of corporation tax will reduce to 25 per cent, as planned, on 1 April 2012.

Transport Costs
3p fuel duty increase planned for January 2012 will be deferred until August and the inflation increase planned for August will be cancelled.

Average rise in regulated rail fares will be capped at 6% rather than the 8% anticipated.

Business Rates
Small Firms Business Rates Relief will be extended to April 2013.

Construction Industry
£400m scheme to kick-start stalled construction projects in England will be introduced.

Mortgage indemnity scheme to help up to 100,000 people buy homes with 5% deposit will be implemented.

Borrowing
National Loan Guarantee Scheme providing up to £20bn of guarantees for bank funding will allow banks to offer lower cost lending to smaller businesses

£1bn business finance partnership will be set up to raise money for medium-sized firms.

Youth unemployment
The Government will introduce a 'Youth Contract' to tackle the growth in youth unemployment. The measures will include:

The provision of funding for an estimated 160,000 wage incentives of £2,275 to make it easier for private sector employers to take on young people.

Funding for at least 40,000 incentive payments for small firms taking on young apprentices.

Tax credits
The child element of the Child Tax Credit and disability elements of tax credits will be uprated in line with the Consumer Prices Index in 2012–13. The planned £110 above inflation increase to the child element of the Child Tax Credit and the uprating of the couple and lone parent elements of the Working Tax has been cancelled to ensure the welfare system remains affordable.