Musings on the Autumn Statement 2014

We were all thinking that George would be playing it softly, softly in this budget with an election just round the corner. When he took to the floor he was quick to deny this stating:

“The measures I announce today are not a net giveaway but actually tighten the public finances a little”

However, with any policy change, there are winners and losers, so here is a quick run-down of some of the changes:

Individuals

– The tax free personal allowance previously set to rise to £10,500 in April 2015 will now increase to £10,600 with no related reduction in the higher rate threshold.

– The annual amount you can save in an ISA is rising from £15,000 to £15,240, and in addition, if an ISA holder dies, they will be able to pass on their ISA benefits to their spouse or civil partner.

– Changing the method of calculating stamp duty land tax. The old system was a slab tax, which meant that as soon as a threshold was passed, the higher rate of duty was paid on the whole amount. The revised scheme, which applies from midnight tonight, will only charge the higher rates on the amount of property price that falls above each threshold.

Businesses

– The doubling of the Small Business Rate Relief is to continue for a further year.

– From April 2015, the NIC break for employers of under 21 year olds will be extended to employers of apprentices under 25.

– Introduced with immediate effect, two measures will hit businesses that are incorporating. The tax charge on the sale of goodwill will no longer qualify for Entrepreneur’s relief, and the future write down of this goodwill in the newly incorporated business will not qualify for a tax deduction.

Companies

– Research and development enhanced relief for SME’s is rising to 230% of qualifying expenditure. For large companies, the above the line credit will rise from 10% to 11%

There was also a re-emphasis of the government’s intolerance of tax avoidance of any kind, and a detailed series of measures to support this.

A more detailed analysis of the announced changes will be posted on our website tomorrow morning – please hop back if you would like to read this.

Alternatively, if you have any questions regarding any of the changes announced in the Autumn Statement please contact a member of the Wright Vigar tax team at your local office – we would be delighted to advise you.