Official Statistics

Autumn Statement 2012 policy decisions table

Published 5 December 2012

This table shows the cost or tax yield of the measures set out by the Chancellor in Autumn Statement 2012.

1. Departmental spending and future consolidation

1.1 Reduction in departmental spending in 2013-14 and 2014-15

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	980	2400	2400’	2400’	2400’

Departmental resource budgets will be reduced by 1 per cent in 2013-14 and 2 per cent in 2014-15. This measure will save £980 million in 2013-14 and £2.4 billion in 2014-15 that can be reprioritised to fund additional investment in infrastructure and support for businesses. The reduction is applied to current control totals in each of 2013-14 and 2014-15, and so is not cumulative.

1.2 Special Reserve

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	650	0	0	0’	0’	0’

The government will reduce the Special Reserve provision to reflect the progress made by the Afghans in taking on responsibility for their security. This is funding held over and above the Ministry of Defence budget. The cost of operations will continue to be paid on the same basis.

1.3 Official Development Assistance: adjusting to meet 0.7 per cent GNI target

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	215	250	430	515’	615’	870’

The allocation of ODA will be adjusted in line with the OBR’s revised growth forecast, so that the UK spends 0.56 per cent of GNI on ODA in 2012, and 0.7 per cent in 2013 and thereafter.

1.4 Council tax: freeze

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-270	-270	0’	0’	0’

As announced on 8 October 2012, the government will set aside £450 million to fund a grant for 2013-14 and 2014-15 to local authorities in England who freeze or reduce their council tax in 2013-14. The devolved administrations will receive additional funding based on the Barnett formula.

1.5 Fiscal consolidation in 2017-18

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	0	0’	0’	4635’

The government has set a fiscal assumption that total managed expenditure in 2017-18 will continue to fall at the same rate as over the Spending Review 2010 period. This assumes that TME in 2017-18 will be £4.6 billion lower than if held flat in real terms from 2016-17 onwards.

1.6 Capital spending package

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-70	-2340	-3045	-	-	-

Table 2.7 sets out £5.5 billion of additional capital investment over the spending review period. The details of each policy decision are set out in Table 2.7 on page 63 of the main document.

2. Growth and enterprise

2.1 4G spectrum sale

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	3500	0	0	0	0	0’

The commercial auction for 4G spectrum, being overseen by Ofcom, is due to be completed by March 2013. Following formal assessment, based on independent analysis of the likely valuation of spectrum receipts by the OBR, the spectrum receipts will be reflected in this Autumn Statement at £3.5 billion.

2.2 Corporation tax: decrease main rate to 21% from 2014-15

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-10	-415	-785	-875	-875

The government will reduce the main rate of corporation tax by a further 1 percentage point to 21 per cent from April 2014. The rate will fall from 24 per cent to 23 percent from 1 April 2013, as announced at Budget 2012.

2.3 Annual investment allowance: 2 year temporary increase to £250,000

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-305	-670	-910	-400	300	235

The government will increase the Annual Investment Allowance limit from £25,000 to £250,000 for two years for all qualifying investments in plant and machinery made on or after 1 January 2013.

2.4 Business rates: empty property relief

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-10	-55	-50	-30	-5

Subject to consultation, the government will exempt all newly built commercial property completed between 1 October 2013 and 30 September 2016 from empty property rates for the first 18 months, up to the state aids limits.

2.5 Business rates: small business relief extension

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-475	50	0	0	0

The government will extend the temporary doubling of the Small Business Rate Relief for a further 12 months from 1 April 2013.

2.6 Cash basis for small businesses

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	-165	25	-5	*

The government confirms introduction of a new cash basis for small, unincorporated businesses to calculate their tax from April 2013. Businesses with receipts of up to £77,000 will be eligible and will be able to continue to use the cash basis until receipts reach £154,000.

2.7 North Sea oil and gas

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-10	-60	-120	-175	-145	-75

As announced in July 2012, the government will introduce a new £500 million field allowance for large shallow-water gas fields.

2.8 Capital gains tax relief: employee shareholder status

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	0	*	-20	-80

As announced on 8 October 2012, the government has introduced a new employee shareholder status. Employee shareholders will have different employee rights to other employees and will receive a minimum of £2,000 of shares. The government will introduce legislation to exempt gains on up to £50,000 of shares acquired by employees taking up the new employee shareholder status from capital gains tax from April 2013.

2.9 High end television: tax relief

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-5	-25	-45’	-60’	-70’

The government announced at Budget 2012 that, following consultation on design, it would introduce corporation tax reliefs for the video games, animation and high-end television industries from April 2013, subject to state aids approval. Under these reliefs, qualifying companies will be able to choose between an additional deduction at a rate of 100 per cent of enhanceable expenditure or a payable tax credit at a rate of 25 per cent of qualifying losses surrendered.

3. Personal allowance

3.1 Personal allowance: increase by £235 to £9,440 in 2013-14, with equal gains to higher rate taxpayers

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-1000	-1110	-1110	-660	-580

The government will raise the tax-free personal allowance by a further £235 to £9,440 in 2013-14 and pass on equal gains from this further increase to higher rate taxpayers, who receive a personal allowance.

4. Motoring

4.1 Fuel duty: cancel January 2013 increase deferred from 2012 and delay future increases to September

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-890	-1640	-1625	-1715	-1420	-1465

To support motorists and businesses with the high cost of fuel, the government will cancel the 3.02 pence per litre fuel duty increase that was planned for 1 January 2013. The government will move the 2013-14 increase planned for April 2013 to 1 September 2013. There will be only one fuel duty increase in 2013. For the remainder of the Parliament, subsequent increases will take effect on 1 September each year instead of 1 April.

4.2 Funding from underspends in 2012-13 through reduced reserve

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	555	0	0	0’	0’	0’

5. 1 per cent uprating

5.1 Working age discretionary benefits and tax credits: increase by 1% for three years from 2013-14

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	505	1430	2280’	2445’	2555’

Most working age benefits will be uprated by 1 per cent for three years from April 2013. This will apply to: Jobseeker’s Allowance; Employment and Support Allowance; Income Support; applicable amounts for Housing Benefit; Maternity Allowance; Statutory Sick Pay; Statutory Maternity Pay; Statutory Paternity Pay; and Statutory Adoption Pay. This excludes the disability, carers and pensioners premia in these benefits and the support component in Employment and Support Allowance, which will continue to be uprated by prices. Child Benefit will be frozen in April 2013, as set out in the June Budget 2010, but will be uprated by 1 per cent for two years from April 2014.

5.2 Child Benefit: increase by 1% for two years from 2014-15

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	175	285’	310’	330’

5.3 Housing Benefit: increase Local Housing Allowance by 1% for two years from 2014-15 with provision for high rent areas

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	105	225’	245’	260’

In April 2013 Local Housing Allowance rates will be uprated as previously announced. In April 2014 and April 2015 Local Housing Allowance rates will be uprated by current policy, subject to a 1 per cent cap, with exemptions for rates in those areas in which rent increases are highest. 30 per cent of the potential savings from this measure will be reserved to fund the exemptions in these two years.

5.4 Universal credit: finalise disregards and increase by 1% for two years from 2014-15

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	170	640’	1000’	1235’

Parameters for Universal Credit have been set. These parameters will be confirmed in regulations on 10 December 2012. The earnings disregards will be set for April 2013 and increased by 1 per cent in April 2014 and April 2015.

5.5 Higher rate threshold: index by 1% for two years from 2014-15

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	295	875	1105	1085

The government will adjust the basic rate limit for income tax such that the higher rate threshold above which individuals pay income tax at 40 per cent increases by 1 per cent in 2014-15 and 2015-16. The upper earnings limit and upper profits limit for NICs will increase to stay in line with the higher rate threshold.

5.6 Inheritance tax: increase nil rate threshold by 1% in 2015-16

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	0	15	30	35

The inheritance tax nil rate band will rise by 1 per cent in 2015-16.

5.7 Capital gains tax: increase annual exempt amount by 1% for two years from 2014-15

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	0	5	5	5

The annual increase in the annual exempt amount for capital gains tax will be 1 per cent for 2014-15 and 2015-16.

6. Other welfare

6.1 Support for Mortgage Interest: extension

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-10	-95	-90	-20’	0’	0’

Temporary changes to SMI are extended until 2015-16 for working-age SMI claims. The waiting period will remain at 13 weeks and the working-age capital limit will remain at £200,000 until 31 March 2015.

6.2 New enterprise allowance: day one access

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	5	-10	0	0’	0’	0’

The government has extended the New Enterprise Allowance scheme so that jobseekers can now access self-employment support from day one of their Jobseeker’s Allowance claim.

6.3 Tax Credits: error and fraud

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	5	0	0	315	185’	85’	*’

Child Tax Credit payments for 16-19 year olds – The government will require annual parental certification that a child aged over 16 is in Full Time Non Advanced Education or Advanced Training qualifying them for the continuation of Child Tax Credit payments until the age of 19.

6.4 Tax Credits: recovering debt

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	5	80	205	125	105	90

The government will conduct a payment-by-results pilot on outsourcing the collection of tax credits debt.

7. Avoidance

7.1 Tax repatriation from Switzerland

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	330	3120	610	920	180	150

The government is today reflecting the benefit of the UK-Switzerland agreement in the public finances following the passing of the agreement by both the Swiss and UK Parliaments. The additional revenues reflect reclaimed tax on money hidden in Switzerland.

7.2 HMRC: anti avoidance

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	15	200	95	330	385	355

The government will increase HMRC’s resources to accelerate its resolution of avoidance schemes, including long-standing avoidance schemes involving

7.3 HMRC investment

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-10	-80	-25	0	0	0

8. Other tax

8.1 Pensions: restrict tax relief

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	50	200	300	600	1000	1125

From 2014-15 the government will reduce the lifetime allowance for pension savings from £1.5 million to £1.25 million and the annual allowance from £50,000 to £40,000. The government will offer a fixed protection regime to individuals to prevent any retrospective tax charges from reducing the lifetime allowance. The government also wishes to offer a personalised protection regime for individuals, in addition to fixed protection, and will discuss the feasibility of this with interested parties in the coming months.

8.2 Bank Levy

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	515	545	540	545	545

The government will set the full rate of the Bank Levy at 0.130 per cent from 1 January 2013.

8.3 VAT: amendments

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-35	-65	-70	-70	-80	-80

Budget 2012 announced a change to the VAT treatment of static holiday caravans. Following consultation, a 5 per cent reduced rate of VAT will apply to static holiday caravans and large touring caravans from 6 April 2013.

8.4 Carbon reduction commitment

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-25	-25	-25	0	30	65

The government will simplify the CRC energy efficiency scheme from 2013 and the Performance League Table will be abolished. The Department of Energy and Climate Change will publish details of these simplifications. The government will review the effectiveness of the CRC in 2016. This review will consider whether the CRC remains the appropriate policy to meet industrial energy efficiency and carbon reduction objectives, and will consider alternative approaches that could achieve the same objectives. The tax element of the CRC introduced at Spending Review 2010 will be a high priority for removal when the public finances allow.

8.5 Gift Aid small donation scheme: amendments

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	-10	-15	-10’	-20’	-30’

As announced at Budget 2011, the government will introduce a Gift Aid Small Donations Scheme from April 2013. Following consultation and the passage of the Small Donations Bill through Parliament, policy adjustments have been made to this scheme to increase the limit per donation to £20, allowing some charities meeting certain conditions to access the scheme on more than £5,000 of donations, and concerning the eligibility criteria and ongoing conditions regarding Gift Aid.

8.6 Amendments to cap on income tax reliefs

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	0	-80	-60	-65	-65

As announced at Budget 2012, the government will cap all previously unlimited income tax reliefs at the greater of £50,000 or 25 per cent of an individual’s income. Charitable reliefs will be exempt from this cap.

8.7 TOTAL POLICY DECISIONS

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	3,970	-910	-920	-905	+295	4,940

8.8 Total spending policy decisions

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	4,840	-1,090	1,465	0	0	4,635

8.9 of which current spending

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	1,360	1,170	4,415	6,435’	7,100’	7,705’

8.10 of which welfare (2)

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	0	430	2,165	3,635’	4,175’	4,500’

(2) There is a tax element of the welfare package that is not included in these numbers, for example on child benefit and tax credits

8.11 of which changes to capital spending (3)

Spend

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	3,480	-2,260	-2,950	-	-	-

(3) 4G spectrum sale will be a capital receipt

8.12 Total tax policy decisions

Tax

Year	12-13	13-14	14-15	5-16	16-17	17-18
£m	-870	180	-2,385	-905	295	305

*Negligible – capital spending measures do not affect borrowing in 2015-16, 2016-17 and 2017-18 as they fall within the Total Managed Expenditure assumption ‘Numbers do not affect borrowing in 2015-16, 2016-17 and 2017-18 as they fall within the Total Managed Expenditure assumption