Autumn Statement On Tuesday 29 November the Office for Budget Responsibility (OBR) published its updated forecast for the UK economy. Chancellor George Osborne responded to that forecast in a statement to the House of Commons later on that day. The Chancellor emphasised that the OBR does not predict a recession in Britain but they have revised down their short term growth prospects for the country. He also made clear that the OBR central forecast assumes ‘the euro finds a way through the current crisis’. The Autumn Statement sets out the actions the government will take in two main areas: protecting the economy and building a stronger economy for the future. In order to maintain economic stability and meet its fiscal rules, the government will: set plans for public spending in 2015/16 and 2016/17 in line with the spending reductions over the Spending Review 2010 period raise the State Pension age to 67 between April 2026 and April 2028 set public sector pay awards at an average of 1% for each of the two years after the current pay freeze comes to an end. The growth plans include the publication of a National Infrastructure Plan 2011. The plan sets out a pipeline of over 500 infrastructure projects. Other announcements include: Credit easing In order to free up lending to business, the government is launching a package of measures worth up to £21 billion to ease the flow of credit to businesses. This includes up to £20 billion for the National Loan Guarantee Scheme and £1 billion for the Business Finance Partnership. Small business rate relief holiday The government will extend the current small business rate relief holiday for a further six months from 1 October 2012 and also give businesses the opportunity to defer 60% of the increase in their 2012/13 business rate bills. Employment regulations In an attempt to make it easier to ‘hire and fire’, the government intends to: look for ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases by introducing a ‘Rapid Resolution’ scheme complete a call for evidence on the impact of reducing the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days. Youth Contract A number of measures under the heading of a ‘Youth Contract’ will be introduced including government funding of: wage incentives for 160,000 young people to make it easier for private sector employers to take them on at least 40,000 incentive payments for small firms to take on young apprentices. Seed Enterprise Investment Scheme (SEIS) This is a new tax relief which will be introduced from 6 April 2012. It will provide income tax relief at 50% in respect of investment in a small company whose total assets before the investment are less than £200,000. The relief will be limited to investments of up to £150,000 in each company and a maximum of £100,000 investment for an individual. In addition an individual who makes a capital gain in 2012/13 and reinvests some or all of the gain in a SEIS company in the same year will obtain exemption from capital gains tax for the sum invested. Tax treatment of asset-backed pension contributions Rules are to be introduced from 29 November 2011 to limit tax relief for employers who enter into arrangements to make asset-backed contributions into their pension schemes. The new rules will ensure that the tax relief obtained more accurately reflects the actual costs to the employer. Further announcements expected It is also expected that large amounts of draft legislation for the Finance Bill 2012 will be issued for consultation on 6 December 2011. We will update you on significant announcements in next month’s enews.    Internet link:    Treasury website back