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Autumn Statement 2012

The Chancellor George Osborne delivered his Autumn Statement 2012 On Wednesday 5 December.

Below are the main areas affecting individual PAYE and payroll, with regards to Tax and National Insurance Contributions.

Income tax allowances

From next April, the personal allowance will rise by a further £235 – that means a total increase next year of £1,335 – the highest increase ever. People will be able to earn £9,440 before paying any income tax at all…we are within touching distance of the £10,000 personal allowance.Chancellor, George Osborne

Table: Income tax allowances

2012-13 (£/year) 2013-14 (£/year) Change (£/year)
Personal Allowance
Aged 65 and under 8,105
Aged 65-74 10,500
Aged 75 and over 10,660
Born after 5 April 1948 9,440 1,335
Born between 6 April 1938 & 5 April 1948 10,500 -
Born before 6 April 1938 10,660 -
Income limit for personal allowance 100,000 100,000 -
Income limit for age-related allowances 25,400
Married couples’ allowance
Maximum amount 7,705 7,915 210
Minimum amount 2,960 3,040 80
Blind person’s allowance
Blind person’s allowance 2,100 2,160 60

Bands of taxable income

The higher rate threshold will be increased by 1% in the tax years 2014/2015 and 2015/2016…

So the income at which people start paying 40% rate will go up from £41,450 to £41,865 and the £42,285.Chancellor, George Osborne

Table: Bands of taxable income

2012-13 £/year 2013-14 £/year
Basic Rate (20%) 0 – 34,370 Basic Rate (20%) 0 – 32,010
Higher rate (40%) 34,371 – 150,000 Higher rate (40%) 32,011 – 150,000
Additional rate (50%) Over 150,000 Additional rate (45%) Over 150,000

Higher rate taxpayers will also be better off next year and no worse off in total for future years. From 2014/2015 the lifetime allowance for pension contributions is reduced from £1.5 million to £1.25 million and the annual allowance is reduced from £50,000 to £40,000. This is primarily a self assessment impact.

National Insurance Contributions rates 2013-14

Changes to National Insurance bands were also announced, but with no further revision to NIC rates.

Table: National Insurance Contributions rates 2013-14

Employee (primary) Employee (secondary)
Earnings £/week NIC rate Earnings £/week NIC rate
Below £109 (LEL) 0% Below £148 (ST) 0%
£109 – £149 (PT) 0% Above £148 13.8%
£149 – £749 (UEL) 12%
Above £797 2%

Fuel Benefit Charge

Rises in the Fuel Benefit Charge multiplier will be applied from April 2013.

Company Car Tax Fuel Benefit Charge 2012-13 2013-14
Car Fuel Benefit Charge Multiplier £20,200 £21,100
Van Fuel Benefit Charge £550 £564
  • 16th December 2012
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