Autumn Statement 2013: at a glance
Chancellor George Osborne delivered his 2013 Autumn Statement at 11.15am on 5 December 2013. Here’s our summary of the key announcements.
• Growth in 2013 revised upwards to 1.4%; then 2.4% next year, followed by annual rises of 2.2%, 2.6%, and 2.7%.
• Britain growing faster than any other western economy.
• No deficit by 2018-19.
• Deficit falls to 6.8% in 2013-14; followed by 5.6% in 2014-15; then 4.4%, 2.7%, and 1.2% in 2017-18.
• Borrowing forecasts: £111 billion in 2013-14 (lower than the March Budget forecast of £120 billion), then £96 billion next year, followed by £79 billion in 2015-16 and £51 billion the year after.
• Total number of jobs to rise by 400,000 in 2013.
• Number of people claiming unemployment benefit fell by 200,000 in last six months.
• Unemployment to fall to 7% in 2015.
• Maths and English tests and training to become mandatory for 18-21-year-olds hoping to claim unemployment benefit.
• State pension to rise by a further £2.95 a week from April 2014.
• An increase to the state pension age will be brought forward. It will increase to 68 in 2030s and 69 in the late-2040s.
• As announced in the March 2013 Budget, the income tax personal allowance will rise to £10,000 from April 2014.
• From April 2015, new married tax allowance will allow married couples and civil partners to transfer £1,000 of their unused allowance to the higher earner.
• New measures to combat tax evasion.
• No increase in Corporation Tax.
• Government will prioritise offshore wind power over onshore.
• Tax allowance for shale gas investors.
• House prices forecast to be 3.1% lower in 2018 than they were at their peak in 2007.
• Funding for Lending scheme focus shifted away from property to small businesses.
• Business rate relief scheme extended for a year.
• Increases to business rates capped at 2% a year from 2014. Plus, firms can pay in 12 monthly instalments.
• Employers will no longer have to pay NI contributions for staff aged under-21.
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
The practice of locating your financial affairs (banking, savings, investments) in a country other than the one you’re a citizen of, usually a low-tax jurisdiction. The appeal of offshore is it offers the potential for tax efficiency, the convenience of easy international access and a safe haven for your money. However, offshore is governed by complex, ever-changing rules (such as 2005’s European Union Savings Directive) and, as such, is the exclusive province of the wealthy and high-net-worth individuals.
Capital gains tax
If you buy an asset – shares, a second home, arts and antiques – and then sell it at a later date and make a profit, that profit could be subject to CGT. You don’t pay CGT on selling your main home (which is why MPs “flipped” theirs so regularly) or any securities sheltered in an ISA. Individuals get an annual CGT allowance (£10,600 in 2010/2011) but if you have substantial assets it’s worth paying an accountant to sort it for you.