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2012 Autumn Statement reaction

06.12.12

George Osborne yesterday revealed his annual Autumn Statement to the House of Commons, and several points may be of interest to self-employed contractors.

Firstly, the coalition government has decided to scrap the IR35-enhancing 'controlling persons' tax, ending months of speculation over the potential legislation, which would have particularly affected Interim Managers and contractors in more 'senior' roles.

The personal tax allowance is to be increased to £9,440 for 2013/14. This is a further £235 on top of the £1,100 already planned to be introduced in April 2013. This is advancement towards the proposed £10,000 personal allowance. The 40% tax bracket threshold is due to be increased by 1% in the next two tax years (2013/14 & 2014/15). It currently lies at £41,450 and will rise to £41,865 and £42,285 respectively.

Basic state pensions are to rise by 2.5% in 2013, increasing the amount of £110.15. However, the annual higher rate allowance has been cut from £50,000 to £40,000 and the current lifetime £1.5m higher rate cap has been cut to £1.25m.

Individual Savers Account (ISA) limits will be £11,520, an increase of £240.

The planned 3p per litre fuel rise has been cancelled, which is good news for everyone.

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