Chancellor George Osborne has delivered his 2012 Autumn Statement, declaring there are “no miracle cures” to plug Britain’s huge £100 billion deficit. But even so, he wielded his axe, with some suffering severe blows, while others breathed a sigh of relief.
So who are the winners?
There was good news for hard-pressed motorists as the chancellor announced the scrapping of the proposed 3p per litre duty rise. Fuel duty was set to increase by 3p per litre in January 2013.
Gareth Kloet, head of car insurance at Confused.com, says: “There is a sense of deja-vu because the chancellor cancelled a proposed fuel 3p a litre fuel duty rise in the Autumn Statement last November."
[Related link: The Autumn Statement 2012 losers]
The basic state pension will rise by 2.5% from April next year to £110.15 per week. There was more reason for cheer, however, for those with income drawdown pensions living off dividends from shares and assets held in these instead of an income from an annuity. The maximum income limit for capped drawdown will be pushed back up from 100% to 120% in 2014/15, so pensioners will be able to draw a fifth more income from their income drawdown plans.
Local businesses also had reason to celebrate with the announcement that corporation tax will be cut by a further 1% to 21% from April 2014. The chancellor was keen to stress that Britain is “open for business”. As expected, he also announced the creation of a £1 billion Business Bank to help small and medium sized firms (SMEs).
The surprise announcement was the two year 100% additional investment allowance tax relief for expenditure on plant and machinery up to £250,000, which will stimulate investment by SMEs.
[Related link: Autumn Statement 2012: The key points at a glance]
An expected, around £1 billion has been set aside to expand up to 100 new academies and free schools over the next two years. This will create tens of thousands of new places for children, and there will also be a further £270 million spent on further education colleges.
Savers battling poor returns on their spare cash will benefit from an increased ISA limit of £11,520 from April, up £240 from £11,280. The cash limit will rise by £120 to £5,760. However, calls to allow the full sum to be held in cash were ignored, as the full ISA limit can only be invested in stocks and shares.
[Related link: The top-paying ISAs]
Higher rate taxpayers
While those on the minimum wage will benefit from the personal tax allowance increase to £9,440 in April 2013, there was a further boost for higher-rate taxpayers. For this group, the threshold for the 40% income tax rate will rise by 1% in 2014 to £41,865. So while on the face of it not a rise to celebrate, coupled with the higher personal allowance this will put pounds back in their pocket.
Frustrated broadband users
Are you a home worker or small business cursing a slow internet connection? I know I often do. The good news is that smaller cities, such as Brighton, York, Cambridge, Newport and Aberdeen, will benefit from investment in super fast broadband, rather than just the big city office hubs.