Autumn Statement: Key points

Posted On December 4, 2014 By mhauk

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. Some of the key changes include:

Effective immediately:

  • 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 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.
  • No new announcements on pension reform coming in April 2015, but 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.
  • Small increases in the rates of Research & Development tax credits.