UK Unveils Several Tax Changes

December 5, 2012 Taxation in UK

Chancellor of the ExchequerLONDON – George Osborne has confirmed that the UK will have to wait for at least five more years before reaching a balanced budget, but he softened the news with the announcement of several tax cuts and allowance increases.

On December 5th the Chancellor of the Exchequer of the UK George Osborne delivered his Autumn Statement in front of the members of Parliament, outlining several tax changes aimed at aiding the country in its economic recovery and return to a balanced national budget.

George Osborne said that the UK has no choice but to continue with its current austerity programs until at least 2018, and he conceded that while the changes have been hard on taxpayers”…turning back now would be a disaster. We have much more to do.”

Amongst the main changes to be carried out over the next few years, George Osborne announced that from April 2014 the rate of corporate income taxes will be cut from 22 percent to 21 percent.

Individual taxpayers will also feel some tax relief, as from 2014 the threshold for the top rate of personal income tax will be raised by 1 percent to GBP 41 865, and to a further GBP 42 285 in the following year.

The tax free allowances offered to individuals will also be increased in 2013, with the first GBP 9 440 of income not being liable for personal income tax.

In his statement the Chancellor revealed that the government’s earlier planned hike of 3 percent to fuel duties will be dropped, and also no new taxes will be imposed on properties.

It was also announced that the country’s tax authorities will further ramp up their efforts to fight tax evasion, and funding to the HM Revenue And Customs will be increased by GBP 77 million, allowing it to take on nearly 2 500 more tax inspectors.

The government currently forecasts that under its current fiscal plan the national budget could  be balanced in five years time.

Photo by HM Treasury