Hacked by Loard Mahdi

Read more...

Breaking news from the BBC Paper tax returns to be replaced by digital by 2020

Read more...

Principal Private Residence Relief

Read more...

Fuel duty tax recovered by economic boost.

Read more...

HMRC revenue from SMEs up 31%

Read more...

Contact Us

News Items

Tax Tips

Brilliant with numbers
Great with people
Clear and precise with advice
Timely and cost effective
In touch with issues that face our clients
Mindful of our client’s long term strategic goals


Helping Your Business is Our Business
 


Call us now on 023 8083 6900 ABDS Home

News - 5 December 2014

The Autumn Statement 2014

George Osborne delivered his final Autumn Statement on 3 December 2014, the last major statement before the General Election next year. The main headlines are:

State of the economy

  • UK fastest growing economy in the G7
  • 3% growth forecast in 2014, up from 2.7% predicted in March
  • 2.4% growth forecast in 2015, followed by 2.2%, 2.4%, 2.3% and 2.3% in the following four years
  • 500,000 new jobs created this year. 85% of new jobs full-time
  • Unemployment set to fall to 5.4% in 2015
  • Inflation predicted to be 1.5% in 2014, falling to 1.2% in 2015

Public borrowing/deficit

  • "Deficit is falling this year and every year." Deficit now cut in half. OBR forecasts borrowing to fall from £97.5bn in 2013/14 to £91.3bn in 2014/15 (£5bn above annual target). Budget surplus of 2015 forecast raised to 2.4%.
  • Borrowing set to fall from £97.5bn in 2013-14 to £91.3bn in 2014-15.
  • Deficit projected to fall to £75.9bn in 2015-6, £40.9bn in 2016-7, £14.5bn in 2017-8 before reaching a £4bn surplus in 2018-9
  • By 2019-20 Britain will have a surplus of £23bn
  • Debt as a share of GDP to rise from 80.4% this year to 81.1% next year before falling in every year. reaching 72.8% in 2019-20
  • World War One debt to be repaid
  • Tax receipts up to 2017-18 to be £23bn lower than forecast
  • A further £10bn of Whitehall efficiencies is planned while £5bn more is sought from crackdown on tax evasion and avoidance.
  • Public service pension reforms will be completed, saving £1.3bn annually.

Stamp Duty Land Tax (‘SDLT’) has been changed and a progressive tax rate will apply to residential sales completed after midnight on Wednesday 3rd December. The ‘break even’ point is £935,000, purchases below that will be subject to lower SDLT than before whereas purchases above that will be subject to higher SDLT.

  • Reform of residential property stamp duty so that rates apply only to that part of the property price that falls within each band
  • 0% paid for the first £125,000 then 2% on the portion up to £250,000
  • 5% up to £925,000, then 10% up to £1.5m; 12% on anything above that, saving £4,500 on average priced home

Tax Personal allowances will increase to £10,600 for the 2015/16 tax year – this is higher than previously advised by the government, giving wage boost of £825 a year.

  • Inheritance tax to be cut for families of aid workers who die in course of their work
  • 55% death tax passed on to loved ones abolished
  • Fuel duty remains frozen.
  • People who die under 75 to be able to pass on annuities, tax free.
  • Libor fines to support Gurkhas and other service veterans and their families
  •  Higher rate income tax threshold to rise to £42,385 next year
  • VAT paid by hospices and search and rescue organisations to be refunded
  • Introduce 25% tax on profits generated by multi-nationals that are shifted out of the UK, set to raise £1bn over five years
  • Bank profits which can be offset by losses for tax purposes to be limited to 50%
  • New £90,000 charge for non-doms resident in the UK for 17 of the past 20 years
  • Inflation-linked increase in business rates capped at 2%

Corporation Tax

  • A so-called 'Google Tax' will introduce a levy of 25% on profits shifted abroad by multi-national firms. The Diverted Profits Tax aims to raise more than £1bn over five years.
  • Banks to pay almost £4bn more in tax over next five years, with profits which can be offset by losses for tax purposes to be limited to 50%.
  • Inflation-linked increase in business rates capped at 2% and discount for shops, pubs and cafes increased by 50% to £1,500.

Personal Savings and Pensions at the time of death of an individual can now be used by a surviving spouse to invest into their own ISA. Although no IHT was payable on the transfer of assets between spouses on death the funds can now be reinvested in full into an ISA.

  • Spouses will be able to inherit their partners' ISAs tax free upon their death
  • ISA threshold increases from £15,000 to £15,240 next April
  • Tax free annuities for dependents of people who die under 75
  • Commitment to complete public service pension reforms, saving £1.3bn a year
  • Air Passenger Duty to be scrapped for under-12s from 1 May next year and for under-16s the following year

Resident non-domiciles will see an increase in the annual charge payable if they wish to retain the remittance basis of taxation. A new scale will apply from £30,000 for those resident in 7 out of 9 tax years up to £90,000 for those resident 17 out of 20 tax years. A consultation is also being proposed to make the election apply for a minimum of three years.


Research & Development Tax Credits paid to small and medium sized companies will increase from 125% to 130% of ‘qualifying expenditure’ incurred after 1 April 2015. The credit for large companies will also increase from 10% to 11%.
National Insurance employers contributions are abolished for apprentices under 25 with effect from 1 April 2016 (unless the apprentice earns more than circa £42,000).

Welfare

  • Welfare spending to be £1bn lower than forecast in March
  • Two year freeze in working-age benefits (first announced in October)
  • Migrants to lose unemployment benefits if they have "no prospect" of work after six weeks
  • The Connection Voucher scheme will be extended until March 2016, and the number of cities covered by the scheme will be increased in April 2015. In particular, the number of northern cities included in the scheme is set to double.
  • The Childcare Business Grant scheme in England will be extended for the 2015/16 financial year following a £2 million increase in funding. This will support the creation of new childcare places.
  • Business and science
  • Business rates to be reviewed
  • Theatre tax break extended to orchestras and new tax credit for children's TV producers
  • Research and development tax credit increased for small and medium-sized (SMEs) firms
  • Support extended to small businesses with £500m of bank lending plus £400m government-backed venture capital funds which invest in SMEs
  • £45m package of support for exporters
  • Expand tax relief on business investment in flood defences
  • Britain awarded the lead role in the international effort to explore Mars
  • National Insurance on young apprentices abolished
  • Entrepreneurs’ Relief will be removed for individuals in respect of the transfer of goodwill to their own company and Corporation Tax reliefs will be restricted for payments in respect of these intangible assets.
  • The New Enterprise Allowance (NEA) scheme will be extended from January 2015, to support new business start-ups.
  • A support package totalling an additional £20 million will be provided to help firms which are exporting for the first time. The increased support will include expansion of the UK Trade and Investment (UKTI) regional network, tailored support to help firms access new markets online, and funding for a global events programme.
  • The Government will allocate £1 billion of the £12 billion Local Growth Fund to support a second wave of Growth Deals between 2015 and 2021.
  • A simplification programme is planned for business licences, with the aim of local authorities in England offering a single online application process by 2018, so a business only need to register its details once.
  • Devolution & Northern Powerhouse
  • Business rates for Wales to be devolved to Welsh Government.
  • Plans law to devolve corporation tax to Northern Ireland if the Northern Ireland executive shows it can manage the financial implications.
  • Investment of £250m in new advanced material science institute in Manchester with branches in Leeds, Sheffield and Liverpool. Tendering for new franchises for Northern Rail and Trans-Pennine Express to ensure modern trains.
  • Income tax to be devolved in full to Scottish Parliament

Energy and fuel

  • Fuel duty to be frozen
  • Sovereign wealth fund for north of England to keep benefits of shale gas exploration
  • Immediate reduction in oil industry supplementary charge from 32% to 30%
  • Health and education
  • £2bn extra every year until 2020 for the NHS
  • GP services to get £1.2bn in extra funds from bank foreign exchange manipulation fines
  • £10,000 loans for postgraduate students studying for masters degrees
  • Employment Allowance worth £2,000 extended to carers

Housing/infrastructure/transport/culture

  • £2bn for flood defence schemes in England
  • Tendering for Northern Rail and Trans-Pennine Express franchises to replace pacer carriages with modern trains
  • A £78m theatre and arts venue is to be built on the former site of Granada's TV studios in Manchester
  • £15bn for 84 roads projects in England by 2021

Funding
A further £400 million will be provided to support venture capital through the British Business Bank's Enterprise Capital Funds programme.

If you need any help or advice on matters arising from the Autumn Statement, contact Lavinia Newman, Stuart Coleman or Liz Kennett, to discuss how ABDS can help
 

ABDS Chartered Certified Accountants of Southampton.
 

Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals

Helping Your Business is Our Business

« Back to News