Autumn Statement 2011

Yesterday the Chancellor delivered his second Autumn Statement. Most of the announcements will come as no surprise to even the most passive of political or economic followers.

In short, the Office for Budget Responsibility (OBR) has had to reduce its growth forecasts for both 2011 and 2012. Whilst better than the OECD’s forecasts, they are by no means encouraging. As a result the Chancellor has had to announce a second round of measures that he hopes will kick start the economy. Here is a summary of the taxation related measures included in the announcements:

Seed Enterprise Investment Scheme - SEIS
A new scheme will be introduced from April 2012 to encourage investment in start-up businesses. The scheme offers 50% income tax relief and a capital gains tax deferral where qualifying investments are made. Details on this new relief are awaited.

Research and Development
An ‘above the line tax credit’ is to be introduced in 2013 with the aim of boosting research and development activity undertaken by larger companies.

Business rates
The business rate holiday relief for small firms is to be extended to April 2013.

Corporation Tax
The planned reduction of the main rate of corporation tax to 25% from April 2012 will go ahead.

Capital Allowances
100% Capital Allowances will be available on qualifying expenditure within some of the recently announced Enterprise Zones (Sheffield & Humber are the two closest of such regions). We are yet to see exactly which items of expenditure will qualify for this enhanced relief.