Welcome to the 2011 Autumn Statement Newsletter from RMT Accountants & Business Advisors Ltd

Chancellor sticks to Plan A for the economy

With the latest report from the Office for Budget Responsibility painting a gloomy outlook for the UK economy, Chancellor George Osborne has vowed that the Government will do whatever it takes to protect against 'the sovereign debt storm'.

In line with recent predictions, the Chancellor announced a reduction in the economic growth forecasts for the UK, revising the forecast for 2011 down from 1.7% to 0.9%. This was accompanied by an increase in Government borrowing, with the forecast for 2011/12 rising to £127bn. However, the Chancellor rebuffed recent reports that the UK is set to slip back into recession in the coming months.

Key announcements for business include the introduction of further credit easing, with up to £20bn being made available to small and medium-sized businesses through the National Loan Guarantee Scheme. The business rate relief 'holiday' for small firms will be extended to April 2013, and a new Seed Enterprise Investment Scheme for small businesses will offer 50% income tax relief for those investing up to £100,000 in start-up businesses, together with a one year freeze on capital gains tax. A £940m 'Youth Contract' will also aim to boost employment by means of subsidised work placements for young workers.

Also central to the announcements was confirmation of a National Infrastructure Plan to boost the UK's road, rail and broadband facilities, to be funded by £5bn of Government spending, with a further £20bn investment expected from British pension funds.

Other significant announcements include a mortgage indemnity scheme aimed at helping 100,000 people to buy homes, a doubling of the number of childcare places for disadvantaged two year olds in England, a new cap on regulated rail fare increases, a cancellation of the rise in fuel duty scheduled for January, and a further increase in the bank levy.

For a detailed overview of the Autumn Statement, visit our summary here.


What They Said

'After 18 months in office the verdict is in: Plan A has failed and it has failed colossally… cutting too far and too fast has backfired and every one of the Chancellor's claims of a year ago has completely unravelled'

Ed Balls, Shadow Chancellor

'This Autumn Statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs. This is "Plan A Plus" in all but name'

John Cridland, Confederation of British Industry

'The biggest challenges to UK businesses remain global demand and economic uncertainty. Firms will give the Chancellor credit for pulling the levers under his control, but will remain concerned about the wider economic environment'

David Kern, British Chambers of Commerce

'Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businesses… the key now is for the Government to be consistent, and set to the task of translating the policy intentions into tangible actions on the ground'

John Walker, Federation of Small Businesses


To view the Autumn Statement in full visit:

http://www.hm-treasury.gov.uk/as2011_documents.htm


Looking ahead: what's in store?

On 6 December the Government will publish draft clauses planned for inclusion in Finance Bill 2012.


ON OUR WEBSITE

Business advice at your fingertips

For a range of information on key issues affecting your business, visit our business guides.

The latest tax rates and information

And for the latest tax information, including up-to-date rates and tax saving strategies, visit our tax guides.


In the News

The Autumn Statement: welfare benefits
The Chancellor made a number of announcements relating to welfare benefits in his 2011 Autumn Statement.

Business reacts to Autumn Statement announcements
The UK's leading business organisation, the Confederation of British Industry, has given a broad welcome to the 2011 Autumn Statement.

2011 Autumn Statement: the political reaction
Opposition politicians and public bodies have given mixed reactions to Chancellor George Osborne’s 2011 Autumn Statement.