How the Autumn Statement will affect our pockets in 2013

In difficult economic times, much of the country waits with baited breath each time the Chancellor of the Exchequer prepares to deliver his latest financial speech.

George Osborne did just that in December when he revealed his Autumn Statement - and as usual there are plenty of winners and losers to emerge based on the details provided by the politician.

The government's latest plans for the economy were aired in public on December 5th and there is much to be learned.

Policies and legislation changes confirmed by Mr Osborne were subject to consultation and scrutiny until February 6th, after which time they will be rubber-stamped.

So who stands to gain the most from the Autumn Statement?

Basic-rate taxpayers

The government already intended to raise the current personal allowance of £8,105 to £9,205 in 2013-14, but it will now hike it even further to £9,440.

This is sure to be good news for cash-strapped wage earners on low salaries, as more of their income will remain free from the tax man. 

This should relieve a little of the financial pressure they find themselves under, while even mid-range earners should notice the difference in their monthly pay packet.

Business vehicle users

There was due to be a 3.02 pence per litre rise in fuel duty on January 1st, but this has now been cancelled, while another increase set for April has been pushed back to September.

This will help British business drivers feel a little better off at the pumps.

Companies looking to invest in the infrastructure of their business

Last year, the annual investment allowance was halved to £25,000, but it has now been confirmed that it will rise dramatically to £250,000 for a two-year period from January 2013.

This makes it more affordable than ever to splash out on essential business equipment and transport.

Who are the losers?

Small firms

They will be excluded from a tax cut due to come into effect in April 2014.

Firms that make profits of at least £300,000 will benefit from a lower corporation tax rate of 21 per cent, but those that fall below this threshold will miss out. 

As such, the smallest businesses will not enjoy such a reduction, making the new regulations bad news for them.

Loss-making firms

From April new rules are to come into effect that limit the amount of income tax reliefs loss-making firms can access.

Relief is to be capped at the highest amount out of £50,000 or 25 per cent of income.

There is undoubtedly plenty to take in and business leaders may find it all a little confusing to start with. But getting one's head around the Autumn Statement and what it will mean for individuals and companies could be the key to financial success in 2013.

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Published on: February 12, 2013

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