Regulation  

Small businesses given Autumn Statement tax break

Small businesses are set to enjoy several tax breaks following Chancellor George Osborne’s Autumn Statement today (5 December).

The government will cap the retail price index increase in business rates to 2 per cent for one year from 1 April 2014, and introduce a business rates discount of £1,000 for retail food and drink premises with a rateable value of less than £50,000 for two years.

In an effort to encourage business to re-occupy empty high street shops in British towns, Mr Osborne will also introduce a 50 per cent business rates relief for 18 months for businesses moving into retail premises which have been empty for at least a year.

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Businesses which take on a new premises will be able to keep the small business rate relief for one year.

Elsewhere in personal tax changes, married couples and civil partners were also offered tax breaks.

A spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year will be entitled to transfer £1,000 of their personal allowance to their other half.

George Osborne unveiled the latest changes to personal income tax allowances confirming these will increase by the consumer prices index measure of inflation in future years, starting from 2015 to 2016.

A married couples’ and civil partners’ tax break, which is set to cost about £700m a year, is proposed to start in April 2015.

As announced at Budget 2013, people born after 5 April 1948 will be entitled to a basic personal allowance of £10,000 for 2014 to 2015. The higher rate threshold (the sum of the basic personal allowance and the basic rate limit) will be £41,865.

As the personal allowance will be £10,000 for 2014 to 2015, this means that the basic rate limit will be £31,865 and the rates of tax will be announced at Budget 2014.

For 2014 to 2015, there are no changes to the percentage rate of contribution for class one, class one A, class one B and class four national insurance contributions but there are changes to all of the thresholds and limits.

The weekly rates for class two and class three NICs will be increased.

The class one upper earnings limit and the class four upper profits limit for NICs will continue to be aligned with the point at which higher rate tax becomes payable - £41,865.

From 6 April 2015 employers will no longer be required to pay Class one secondary national insurance contributions on earnings paid up to the upper earnings limit to any employee under the age of 21.