Autumn Statement 29 November 2011

Tax

Seed Enterprise Investment Scheme (SEIS)

A new Seed Enterprise Investment Scheme (SEIS) will be launched with effect from April 2012. It will provide 50% income tax relief to encourage individual investments of up to £100,000 in start-up companies. Investors will also have a capital gains tax exemption on gains realised and then re-invested through SEIS in 2012/13.

In addition, the Government will simplify and refocus the Enterprise Investment Scheme and Venture Capital Trusts.

Capital gains tax (CGT)

The annual exempt amount for CGT will be frozen at £10,600 for 2012/13.

Business rates relief

The temporary small business rate relief will be extended for a further six months from 1 October 2012. Businesses will also have the opportunity to defer 60% of the increase in their 2012/13 business rate bills as a result of the retail prices index uprating, to be repaid equally across the following two years.

Enterprise zones

100% capital allowances for plant and machinery investment over five years from April 2012 will be made available in the following enterprise zones: the Black Country; Humber; Liverpool; the North East; Sheffield; and Tees Valley. The Government will also approve proposals from the Lancashire and Humber Local Enterprise Partnerships to form enterprise zones on and around the BAE Systems’ sites in these areas.

The existing enterprise zone in the North East will be extended to include land around the Port of Blyth, subject to due diligence. The Government will also consider establishing an enterprise zone in Battersea, which will be linked to the redevelopment of the power station.

Business tax developments

An ‘above the line’ tax credit will be introduced in 2013 to encourage research and development (R&D) activity by larger companies. The Government will consult on the details in the Budget 2012 and will ensure that R&D incentives given to small and medium-sized enterprises (SMEs) are not reduced as a result of this change. This builds on measures in the Budget 2011 to increase the amount and accessibility of R&D tax credits for SMEs.

On 6 December 2011, further details will be published of the Patent Box, and of the reform of the Controlled Foreign Company rules and R&D tax credits.

Bank Levy

The Bank Levy is intended to raise at least £2.5 billion each year. The rate of the Bank Levy will increase to 0.088% (from 0.078%) from 1 January 2012 to offset the forecast shortfall in receipts for 2011 and future years.

Employer pension contributions

Changes will be made to the tax rules to ensure that the amount of tax relief given to employers making asset-backed pension contributions to registered pension schemes accurately reflects the amount of payments made and does not give rise to excess relief.