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The Autumn Statement 2012: 3 Minute Guide

At 12.30pm on Wednesday 5th December Chancellor George Osborne announced his Autumn Statement 2012 setting out the coalition government's fiscal plans for the coming years.

With the economy still not back on track and a deficit that still needs to be plugged no one expected the Chancellor's Autumn Statement to be easy to swallow.

We've summarised the aspects of the Autumn Statement 2012 that are most likely to have a direct impact on your finances.

Check the table, find out how you'll be affected by the changes then share your opinion of the Chancellor's plans with our community.

Tax
Personal allowance	Personal allowance will increase to £9,440 from next April, an extra £235 on top of the rise already planned. That means that you’ll be able to earn £1,335 more without paying tax.
40% tax threshold	The higher rate income tax threshold will increase by 1% in 2014 and 2015, to £41,865 and £42,285 respectively.
ISAs	The ISA allowance will increase to £11,520 from next April.
Inheritance tax	The inheritance tax nil-band rate will increase by 1% to £329,000 in 2015.
Capital gains tax	The Capital Gains exemption threshold will increase by 1% a year for two years from 2014 - to £11,000 then approx. £11,100 respectively.
Council tax	Local Authorities will be incentivised to freeze or reduce council tax in 2013 through the government-run grant system currently in place.
Corporation tax	The main rate of Corporation Tax will be cut to 21% in April 2014.
Small business rate relief	Small business rate relief will be doubled for a further 12 months from April 2013.
Tax avoidance	Tax avoidance loopholes will be closed, advisors that market 'aggressive' tax avoidance schemes will be stopped and a dedicated HMRC taskforce to tackle offshore tax evasion will be created.

Pensions
State pension	The basic state pension will be increased by 2.5% in April 2013, the equivalent of £2.70 extra a week.
Pension contributions	The annual allowance for pension contributions will be reduced from £50,000 to £40,000 and the lifetime allowance from £1.5m to £1.25m in 2014.

Transport
Fuel	The 3p/litre fuel increase due for January 2013 will be cancelled until September at the earliest.
Trains	Increases in regulated rail fares and Transport for London fares will be capped at maximum of 1% above the RPI rate of inflation from January.

Benefits & tax credits
Benefit cap	Annual increases to most work-related benefits and tax credits will be capped at 1% for 3 years from April 2013. This includes the main elements of Jobseeker's Allowance, ESA and Income Support, Child Tax Credit and Working Tax Credit (except the family element and elements already frozen). Planned increases to pension, disability and carer benefits will not be affected.
Child benefit	Child benefit will be limited to a 1% a year rise for two years from 2014.

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Responses (7)

Thank you for that, Hannah. I missed the news today.
Raising the Personal allowance will be good for me as is the cancellation in fuel tax. The rest of it doesn't seem to make much difference in my situation. Thankfully.

by save24, 5 months ago

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Mostly positive, Hannah.

Good news about the Personal Allowance and the Fuel Tax.

And great if they close the tax-avoidance loopholes.

by Feline123, 5 months ago

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As grim as I expected .
Prepare for a Triple Dip Recession .

by nadge, 5 months ago

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Come on, nadgelet. Cut in corporation tax and help for small businesses. Got to be good for a bit of growth, surely......?

Could have been a lot worse!

by Feline123, 5 months ago

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You are spot on nadge. Wait for this triple dip recession in early 2013 and wait for the triple trickle of excuses from Gideon Osborne of wintry road blocks, Euro-zone crisis, US political gridlock, snow, snow and snow blocking up economic recovery. Do not forget where you heard first these 2013 excuses in advance.

by creativesaver, 5 months ago

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I actually thought it was quite positive, CS.

Why not wait to pass judgement until we see what happens?

by Feline123, 5 months ago

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Gormless Gideon is clueless , and dangerous .

by nadge, 5 months ago

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The Gormless Clown does more U turns than a U bend .
A very , very inept , and extremely dangerous , frothing-at -the- mouth tory git .
Thanks to the ineptitude of this Goon and his traitorous mob , Britain's AAA Rating is in severe jeopardy .

by nadge, 5 months ago

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The highlight for me has to be the 3p/litre fuel increase due for January 2013 will be cancelled until September at the earliest. I do close to 1000 miles a month.

by creativesaver, 5 months ago

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If we go back into recession in early 2013 then Gideon Osborne should go back to do his old job because he is really NOT up to it as Finance Minister (Chancellor of the Exchequer).

by creativesaver, 5 months ago

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I haven't heard anybody suggesting we're going back into recession.

by Feline123, 5 months ago

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We never left it !
UKs Triple A rating is in jeopardy .
Gormless Gideon is a liability , in an inept government of liabilities .

by nadge, 5 months ago

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Thanks Hannah nice & succinct.

by townse, 5 months ago

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Thanks Hannah, easy to read and understand. I still can't find out if my husband's attendance allowance increase next year will be 1% or linked to OA pension rates increase, or nothing at all.

by dejayr, 5 months ago

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I agree, dejay, I'm trying to find out about Mr F's DLA.

by Feline123, 5 months ago

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