Autumn Statement 2012

We were hoping for some positive news for new businesses and we were not disappointed as small businesses were given a boost in the Autumn Statement.

The Chancellor increased the investment allowances on capital expenditure to £250,000.

This 10-fold increase will enable firms to claim 100% tax relief on capital investment up to £250,000. We believe capital allowances form an important part of an investment strategy as they help to mitigate corporation tax for small firms and personal income tax for partners in a limited partnership.

In other developments, the annual tax-free allowance was reduced from £50,000 to £40,000 and the lifetime pension relief allowance was reduced from £1.5m to £1.25m making pensions a less attractive investment option for HNW investors. We believe investors will have to look at alternative options for tax planning, including EISs and VCTs.