The Chancellor of the Exchequer delivered his 2015 Spending Review and Autumn Statement today and, from a tax perspective, it more a case of what was not announced.
There was no announcement either on the predicted crackdown on personal service companies or on the restrictions to Entrepreneurs Relief.
Seemingly, the Treasury has benefited from a windfall of £27bn from the combined effects of higher than anticipated tax receipts and lower debt interest.
As a result, there were very few tax measures announced in the Autumn Statement. The main ones being:
The taper rate where a recipient’s award is reduced when their income exceeds the income threshold will remain at 41% of gross income from April 2016. Similarly, the income threshold will remain unchanged.
Tax Free Childcare
The upper income limit to qualify for Tax Free Childcare will reduce from £150,000 to £100,000 per parent.
Stamp Duty Land Tax (SDLT) on Additional Properties
From April 2016, a higher rate of SDLT will be charged on the purchase of additional residential properties for more than £40,000. The higher rate will be 3% above the current SDLT rates and will apply to buy-to-let properties and second homes.
However, this will not apply to caravans, mobile homes or houseboats and the government will examine whether there should be an exemption for corporate investors.
The government will also consult in 2016 on changes to the SDLT filing and payment process to reduce the window from 30 days to 14 days.
Capital Gains Tax
From April 2019, a payment on account of any Capital Gains Tax due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal.
This will not impact a main dwelling where Private Residence Relief applies and, therefore, there is no tax due.
The government intends to publish draft legislation for consultation on this in 2016.
Tax in the Digital Age
The government is going to invest £1.3 billion aimed to transform HM Revenue and Customs into a world leader in digitally advanced tax administration.
As a result, most businesses, sole traders and landlords will be obliged to keep track of their tax affairs digitally and update HMRC on at least a quarterly basis.
As part of this process, there are undertakings to provide free apps and software that link securely to HMRC systems and to provide support to those who need help using digital technology.
This requirement will not apply to those in PAYE employment or pensioners, unless they have secondary incomes of more than £10,000 per year.
The intention is for the government to issue their plans shortly as a precursor to a full consultation in 2016.
Our detailed review of the Autumn Statement will be published tomorrow. In the meantime, if you would like to discuss how the Autumn Statement will affect you, please email us at firstname.lastname@example.org.