Autumn Statement 2011 At A Glance

Bank Levy rate
•    The full rate of the Bank Levy will be set at 0.088 per cent from 1 January 2012.

Capital allowances: Enterprise Zones
•    Enterprise Zones in six assisted areas will qualify for enhanced capital allowances.  In these areas, 100 per cent allowances will be available for plant and machinery investment incurred between April 2012 and March 2017.

Capital gains tax
•    Annual exempt amount for capital gains will remain unchanged at £10,600 from 6th April 2012.

Corporation tax
•    The Chancellor reminded us that he announced in the March 2011 Budget that the main rate of corporation tax for companies with profits over £1,500,000 is to be reduced to 25% from 1st April 2012.
•    The Government will put beyond doubt that manufactured overseas dividends cannot be used to obtain repayment or set off of income tax that the Exchequer does not receive.  This was announced in a Written Ministerial Statement on 15 September 2011 and will take effect from that date.
•    Following consultation over summer 2011, the Government will publish on 6 December 2011 further details of the Patent Box and of its reform of the controlled foreign company rules and research & development tax credits.
•    The Government is also planning to introduce an ‘above the line’ tax credit in 2013 to encourage research and development activity by larger companies. The Government will consult on the detail at Budget 2012 and will ensure that SME research % development incentives are not reduced as a result of this change.

Employer pension contributions
•    The Government is to introduce changes to the tax rules to ensure the amount of tax relief given to employers making asset-backed pension contributions to registered pension schemes accurately reflects the amount of payments made, and does not give rise to unintended excess relief.
•    The Government will introduce these changes in the Finance Bill 2012.  The changes are to take effect from 29 November 2011.

Enterprise Investment Scheme, Venture Capital Trusts and Seed Enterprise Investment Scheme
•    The Government announced at Budget 2011 that it would consult on options to provide new support for seed investment, simplify the Enterprise Investment Scheme (EIS) and refocus both EIS and Venture Capital Trusts (VCTs) to ensure they are targeted at
genuine risk capital investments.
•    As a result of the consultation, the Government will introduce the new Seed Enterprise Investment Scheme (SEIS) to encourage investment in new start-up companies. SEIS will provide income tax relief of 50 per cent for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of £100,000 and cumulative investment limit for companies of £150,000.
•    In addition, the Government will offer a capital gains tax holiday for investments made into the new scheme. This will provide for a capital gains tax exemption on gains realised on disposal of an asset in 2012-13 and invested through SEIS in the same year.
•    The Government will also simplify the EIS by relaxing the connected person rules and the definition of shares that qualify for relief.
•    The Government will tighten the focus of the schemes by introducing a new test to exclude companies set up for the purpose of accessing relief, exclude acquisition of shares in another company and exclude, as previously announced, investment in Feed-in-Tariffs businesses.  
•    In addition to these changes the Government will remove the £1 million investment limit per company for VCTs to reduce the administrative burdens of the scheme.

Fuel duty
•    The Government announces that the 3.02 pence per litre fuel duty increase that was due to take effect on 1 January 2012 will be deferred to 1 August 2012.
•    In addition, the increase that was planned for 1 August 2012 will be cancelled.

Gifts of pre-eminent objects
•    At the Budget 2011, the Government announced that it would consult on proposals to encourage donations of pre-eminent works of art or historical objects to the nation in return for a tax reduction.
•    Following consultation, the Government will legislate to enable individuals to receive a reduction in their income tax or capital gains tax liabilities, and companies to receive a reduction in their corporation tax liabilities, in return for donating pre-eminent objects under this new scheme.
•    Total tax reductions under this scheme, and taxes offset under the existing inheritance tax "acceptance in lieu of tax scheme", will be subject to an increased annual limit of £30 million a year overall.

Small business rate relief
•    The Government will extend the small business rate
relief holiday for a further six months from 1 October 2012.
•    The Government will also give businesses the opportunity to defer 60 per cent of the increase in their 2012-13 business rate bills as a result of the Retail Prices Index uprating, to be repaid equally across the following two years.

VAT
•    Low value consignment relief - as announced on 9 November 2011, the Government will remove the VAT relief for low value goods (below £15) sent to the UK from the Channel Islands with effect from 1 April 2012.
•    Cost sharing exemption – following consultation after Budget 2011, the Government will introduce a VAT exemption for services shared between VAT exempt bodies, including charities and universities.

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