The 2014 Autumn Statement contained a large number of detailed proposals on tax and spending, some of which were only hinted at in the Chancellor’s speech. See our bullet points which summarise the key changes for you.
- Major reform of Stamp Duty Land Tax rates on residential property: SDLT to be paid on bands of purchase consideration at a marginal rate rather than the whole consideration at a single rate. 98% of house purchases will see a reduction; those above £937,000 will increase.
- Restriction of tax planning on incorporation of a business: Entrepreneurs’ Relief and corporation tax deduction no longer available for goodwill transferred to a company by connected individuals.
- Action on some tax avoidance schemes, including use of “miscellaneous losses” created to reduce tax on income.
Coming in April 2015:
- The personal tax allowance will be raised to £10,600 in 2015/16, rather than £10,500 as previously announced (from £10,000 in 2013/14).
- The 40% higher rate threshold will be raised from £41,865 in 2013/14 to £42,385 in 2015/16.
- Confirmation that tax charges on passing a pension fund or annuity to beneficiaries on death will in many cases be abolished.
- £2,000 Employment Allowance relief from employer’s National Insurance contributions to be extended to care and support workers from April 2015.
- Increases in the annual tax charge payable by long-term resident foreign domiciled individuals for 2015/16: £60,000 for those resident in 12 of the last 14 years (up from £50,000), and a new rate of £90,000 for those resident in 17 of the last 20 years.
- Increase in ATED charge on houses owned through companies for houses valued at over £2m.
- From 1 May 2015, Air Passenger Duty abolished for children under 12 on economy flights.
- Exemption for “trivial” benefits costing up to £50 provided by employers; some reimbursed expenses will also be exempted rather than requiring declaration and a claim for deduction by the employee.
- ISA annual subscription limit rises from £15,000 to £15,240; permission to transfer tax-free ISA status to spouse or civil partner on death.
- The temporary doubling of small business rate relief will be extended for yet another year from 1 April 2015; increase in rate relief for small retail outlets from £1,000 to £1,500.
- R&D tax relief for SMEs will increase from 225% to 230% and the above the line R&D tax credit from 10% to 11% from 1 April 2015; a new corporation tax relief will be introduced for productions of childrens’ tv programmes; there will be consultation on the introduction of a new corporation tax relief for orchestras from 1 April 2016.
Please contact us if you would like further details on any of the above.