Autumn Statement 2013

Good news if you want to employ a youngster, go to university, rent a shop or use a lot of fuel.

The Autumn Statement predicts increased growth, up to 1.4% from 0.6% for 2013, and the total in employment by 2018 of 31.2 million.  In other words, about half the population.

Fuel duty is to be frozen for the rest of this Parliament.  Employers will not have to pay employer National Insurance on under-21 year olds, unless they are being paid more than £813 a week (in other words higher rate taxpayers).

Business Rate rises will be limited to no more than 2% irrespective of higher inflation in 2014/15, and retail property will benefit from a rate discount of up to £1,000 in 2014/15 and 2015/16.  This will apply to properties with a rateable value of less than £50,000.  In addition new occupiers of shops which have been empty for at least 18 months will get a 50% discount on their rates bill.  Small Business Rate Relief will be doubled from April 2015.

Local authorities will be encouraged to sell high value vacant social housing in order to reinvest in new housing, and their revenue account borrowing limits will be raised in order to encourage social housing investment.

The Personal Allowance for Income Tax increases to £10,000 next April and a new form of Married Couples Allowance makes its debut.  It applies to civil partners as well, but don’t get too excited.  The transferable tax allowance of £1,000 arrives in 2015/16 and is NOT available where either party is a higher rate taxpayer.  So who does this help?  Couples where perhaps one partner isn’t able to use their own tax allowance in full and the other partner is an ordinary rate taxpayer.  So the resulting benefit is likely to be no more than £200 a year.

If your overseas clients are thinking of selling UK residential property they had better act now, as CGT is to be introduced on non-residents’ disposal of UK residential property.

Energy

Fracking – onshore oil and gas exploration – will receive a new tax allowance with immediate effect.  Details are thin at this stage however.

A new fund to help private landlords to improve the energy efficiency of let property is to be introduced.

Grants of up to £1,000 will be available to make substantial energy investments in property newly purchased over the next three years.

Infrastructure

The National Infrastructure Plan gets a makeover, but don’t get too excited.  Buried in the small print of the UK Insurance Growth Action Plan is the expectation that 70% of planned expenditure is expected to come from the private sector (meanwhile Defra sees cuts to its budget of £19 million next year and £18 million the year after).  Setting aside this small reservation, the list of projects includes:

  • New nuclear power at Wylfa in North Wales;
  • Railway station improvements at Gatwick Airport;
  • Improvements to the A50 at Uttoxeter by 2015/16;
  • The A14 improvements near Cambridge will not include a new toll road;
  • A new £10 million competition for ‘hard to reach’ broadband will launch in 2014, which may therefore be helpful to the less accessible rural areas;
  • Topical on the day that an Autumn Statement is accompanied by the threat of the worst floods on the East Coast since 1953, we are promised a list of key flood defence projects by the time of next year’s Autumn Statement;
  • There is also to be a £10 million prize pot for the first town or city to set up a pilot driverless car project.

A new Infrastructure Court is also promised – so look for some interesting relationships with the work of the Planning Inspectorate’s Major Infrastructure Unit (formerly the Infrastructure Planning Commission!).   So will this be IPC2?

The UK Insurance Growth Action Plan includes a chapter which introduces the investment of £25 billion by six insurance companies in infrastructure over the next five years.  They will be looking for commercially and economically viable economic and social infrastructure projects, most probably in transport, housing, energy, health and education.  This can include major projects led by private sector sponsors.  Projects already undertaken include campus developments, student accommodation, Alder Hey Children’s hospital.  And look out for a new logo to be displayed on infrastructure emerging from this initiative!  It’s a shame however, that this makes no mention of ‘green’ infrastructure – surely an attractive opportunity for the insurance industry where the reduction of flooding risk is on offer?

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One Response to Autumn Statement 2013

  1. […] Read what other people have said about the 2013 Autumn Statement: To read ‘Autumn Statement 2013, Knight Frank’s reaction…’ click here To read what Charles Cowap has to say about the Autumn Statement click here […]

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