Autumn Statement: Implications for the Motor Sector
Posted On December 4, 2014 By mhauk
Compared to previous speeches by the Chancellor, this time’s statement held relative few large changes, no doubt adopting a ‘treading carefully’ approach in the run up to the election.
Whilst there is some incidental support for the motor sector (fuel duty frozen – billions more on road improvements), there is little in the way of direct assistance.
For manufacturers, they will be able to benefit from the increase in the above the line R&D tax credit, which will become 11% from 1 April 2015.
For dealers, there was a small missed opportunity! The SDLT changes are a positive development for the residential property market, removing unfairness from the system. Why has this unfairness been left for the motor sector and the rest of the commercial property market?
A dealer buying a site for £500,000 will pay SDLT of £15,000 (3%). Spending just £1 more the SDLT will jump to £20,000 (4%). There appears to be no logic for leaving this distortion in the commercial property market and it must have been left in place due to the cost to the Exchequer.
Also announced was a 2% cap on the RPI increase in the business rates multiplier for an additional year from 1 April 2015 and a revenue neutral review of the entire Business Rate system, scheduled to be completed in time for Budget 2016.
It is disappointing that whilst the statement suggests that the Government are committed to introducing 51 of the 58 recommendations made by the Office of Tax Simplification, it does not state which are to be introduced and when. The announced proposed change in benefit reporting which permits employers to payroll these and not report on a P11d at the year end is to be welcomed. This will make it easier and is likely to avoid problems at the tax year end for employees. The concession of £50 of exemption of reporting of minor benefits is lower than expected and is a token gesture. Also the proposed taking away of the £8,500 limit for benefit reporting will leave some employees out of pocket with the only help given in this regard to carers and clergymen
The proposed clampdown on the use of salary sacrifice arrangements for travel and subsistence expenditure will impact on a number of employers who will have to consider their current practices. Those who engage workers via an umbrella arrangement are likely to see the tax advantages of this type of arrangement disappear.
If you would like to discuss how we are able to assist your motor business please contact us.