How the Autumn Statement Will Affect Your Business

Following the 2014 Autumn Statement on Wednesday 3 December 2014, Morris Owen summarises the announcements made by Chancellor George Osborne and how they'll affect your business.

Measures announced during the 2014 Autumn Statement that affect businesses included increases in the rates of R&D relief for both small and medium and large businesses, as well as national insurance contribution discounts for employers who take on apprentices aged under 25.

Tax credit rates

For small and medium sized enterprises the R&D rate will increase from 225% to 230%. For large enterprises the above the line credit will increase from 10% to 11%. These changes will take effect from 1 April 2015.

Qualifying expenditure

The cost of materials incorporated into products sold on will no longer be qualifying expenditure for R&D tax credits from 1 April 2015.

Advance assurance

A new advance assurance scheme will be introduced for small businesses making their first claim for R&D tax credits.

Apprentices

Employer NICs up to the upper earnings limit for apprentices aged under 25 will be abolished from April 2016.

Employment Allowance

The £2,000 Employment Allowance for employer NICs will be extended to those households who employ care and support workers from April 2015.

Small Business Rate Relief

The doubling of the Small Business Rate Relief was extended to April 2016. Approximately 385,000 of the smallest businesses will continue to receive 100% relief from business rates.

The 2% cap on the RPI increase in business rates multiplier was also extended until April 2016.

Retail and food and drink premises with a rateable value of £50,000 and below will get an increased business rates discount of £1,500 up to the state aid limits for 1 year from 1 April 2015.

Bank Loss Relief Restriction

The amount of a bank's annual profit that can be offset by carried forward losses will be restricted to 50% from 1 April 2015. The restriction will apply to losses accruing up to 1 April 2015 and will include an exemption for losses incurred in the first 5 years of a bank's authorisation.

Supplementary Charge and Ring Fence Expenditure

The rate of the supplementary charge will reduce from 32% to 30% from 1 January 2015. The government will aim to reduce the rate further in a sustainable way. There was also an extension to the ring fence expenditure supplement to 10 years for offshore oil and gas activities.

High Pressure, High Temperature Cluster Area Allowance

Legislation is being introduced to create a new cluster area allowance to support the development of high pressure, high temperature projects and encourage exploration and appraisal activity in the surrounding area. The allowance will exempt a portion of the company's profit from the supplementary charge equal to 62.5% of the qualifying capital expenditure a company incurs in relation to a cluster area on or after 3 December 2014.

Enterprise Zones

The government will seek to extend the Enterprise Zone in Nottingham to a site in Derby and will consider the case for further extensions to existing Enterprise Zones at the Budget.