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)|
|Aged 65 and under||8,105|
|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|
|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
|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%|
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|