Autumn Statement 2016 Reply

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Phillip Hammond gave his first Autumn Statement on 23rd November 2016

As expected Brexit is forecast to reduce growth and borrowing will be higher.

But let’s focus on the Business related key points:

Employment

  • National Living Wage increasing to £7.50 from £7.20 in April 2017
  • Personal Allowances will increase to £11,500 in April and to £12,500 by the end of the Parliament
  • The Higher Rate Threshold will increase to £50,000 by the end of this Parliament
  • Salary Sacrifice is to be restricted to Childcare, Cycle to Work and Ultra-low Emmission Cars
  • Employee Share Scheme lose their income tax relief and capital gains tax exemption
  • New rules will take effect in April 2017 regarding Assets made available without transfer of ownership
  • From April 2018 termination payments could be subject to employers NIC

Corporation Tax

  • Corporation tax rates are reducing
    • Financial year 2017 19%
    • Financial year 2018 19%
    • Financial year 2019 19%
    • Financial year 2020 17%
  • From April 2017 new rules will create a restriction meaning that losses of up to 50% of profits can be offset with a £5m allowance per company
  • From April 2017 corporation tax relief for interest will be restricted where the interest is over £2m

VAT & Insurance Premium Tax

  • Insurance Premium Tax is going up to 12% in June 2017
  • A new 16.5% Flat Rate will be applied to businesses in the Flat Rate Scheme with limited expenses such as Labour Only Contractors, the new rate starts in April 2017

Tax Avoidance

  • Changes to the Flat Rate Scheme should generate £695m by 2021/22
  • The Government will push ahead with the introduction of a new penalty for a person who enables another person or business to use a tax avoidance scheme that is defeated by HMRC
  • HMRC will increase the number of court cases

Property

  • The introduction of £1,000 property income allowance from April 2017
  • Letting Agents will no longer be able to charge renters fees

steve@bicknells.net

Key Points from the Autumn Statement 2013 Reply

Tax Money

The Chancellor George Osborne presented the Autumn Statement to the House of Commons on 5th December 2013 and things are getting better, economic growth forecasts for this year have more than doubled from 0.6% to 1.4% but the austerity plan is set to continue.

Here is a summary of the key announcements:

Business Rates

Business rate increases in England will be capped at 2% in 2014/15 (they were set to increase by 3.2%) and businesses will be able to pay over 12 months rather than 10.

The Retail Sector will also get a £1,000 discount in 2014/15 and 2015/16, this applies to pubs, cafes, restaurants and charity shops with a rateable value below £50,000.

A reoccupation relief of 50% is being introduced for up to 18 months on premises that have been empty for a year or more and it will apply from 1st April 2014 to 31st March 2016.

Small Business Rate Relief has been extended to April 2015 under the scheme small businesses with a rateable value of £6,000 or less can get 100% relief, the relief is scaled down to zero on rateable values of £12,000 and there is a lower multiplier on rates between £12,001 and £17,999.

Income Tax

As previously announced the personal allowance will be £10,000 for the tax year 2014/15.

From April 2015, a spouse or civil partner who is not liable to income tax will be able to transfer £1,000 of their allowance to a basic rate tax paying spouse and as a result save £200 in tax.

State Pension Age

By 2020 it will be 66, by 2028 it will be 67 and by mid 2030’s 68, then in 2040’s 69.

Capital Gains Tax

The annual exempt amount will be £11,000 for individuals for 2014/15.

But there was an exemption for principle private residence  letting for 36 months and from 6th April 2014 it will be reduced to 18 months.

Consultation will start in April on non-residents paying capital gains on property disposals.

Individual Savings Account (ISA)

The limit will rise to £11,880 for 2014/15 and of this £5,940 can be invested in cash ISA’s

Mortgage Guarantee Scheme

The scheme started in October will run for 3 years and end in January 2017.

Buyers will only need a 5% deposit and the government and the funder will guarantee 15% of the loan in return for a fee.

IR35

Legislation will be tightened from April 2014.

Anti-avoidance

A range of measures were discussed in addition to IR35 and these included:

  • Partnership Tax
  • Controlled foreign companies
  • Charities
  • High risk tax avoidance schemes
  • Dual contracts

Other headline measures

  • Employers NI for under 21’s to be scrapped in 2015
  • Rolling back green levies to allow an average saving of £50 on energy bills
  • Free school meals for infants
  • Scrapping of 1% above inflation rail fare increases
  • Electronic tax discs
  • Abolition of next years 2p per litre fuel duty rise

 

steve@bicknells.net

 

What did you think of the UK Autumn Statement? 1

Big Ben with city bus and flag of England, London

The key points were:

Individuals

Tax

• Income tax personal allowance to go up to £9,440 next year, £235 more than previously announced. The rise will be extended to higher rate tax payers.

• Threshold for 40% rate of income tax to rise by 1% in 2014 and 2015 from £41,450 to £41,865 and then £42,285.

• Inheritance tax threshold to rise from £325,000 now to £329,000 in 2015/16

• Planned 3p per litre rise in fuel duty scrapped

• Capital gains tax annual exempt amount to increase by 1% over the same period, reaching £11,100

• No new tax on property

Pensions

• From 2014/15 will further reduce lifetime pension relief allowance from £1.5 to £1.25m. Annual tax-free allowance reduction from £50,000 to £40,000

• Basic state pension to rise by 2.5pc next year to £110.15 a week

• Increase in capped drawdown limit for pensioners from 100pc to 120pc

Savings

• Overall ISA limit increased to £11,520 from next April

Business

• SME equity markets to be held directly in stocks and shares ISAs

• The main rate of corporation tax to be cut by 1% to 21% from April 2014

• Bank levy rate to be increased to 0.13pc next year

• Temporary doubling of the small business rate relief scheme to be extended by a further year to 2014

• £1bn extra capital for Business Bank

http://www.telegraph.co.uk/finance/budget/9723417/Autumn-Statement-2012-key-points.html

Department for BIS key points:

  • An additional £600 million for science, research and innovation, which takes the total investment since the 2010 spending review to an additional £1.5 billion.
  • An extra £270 million to be spent on laboratories, classrooms and other facilities in our Further Education colleges.
  • £1 billion confirmed for the business bank, which will address the long-term structural gap in lending to small businesses.
  • An extra £120 million invested in supply chains, to encourage companies to invest here in the UK.
  • The Regional Growth Fund will also receive an additional £350 million, bringing the total available in 2012-13 to £2.75 billion.
  • Extra money for the Employer Ownership Pilot, taking it to £340 million overall and giving businesses funding so they can design and develop their own training programmes.
  • Increased funding of £140 million for UK Trade & Investment (UKTI) to help small and medium sized business export abroad.
  • £1.5 billion to help our smallest companies to access growing markets overseas. For the first time UK Export Finance, the Government’s export credit agency, will be able to issue loans to overseas customers and buyers wanting to purchase goods from UK businesses.
  • A package of measures to cut back red tape that business has told government stops them from growing.

http://www.bis.gov.uk/news/topstories/2012/Dec/autumn-statement-2012

Britain’s small businesses were given a boost in the Autumn Statement when the Chancellor instigated a tenfold increase in allowances on capital spending such as tools, office equipment and commercial vans to £250,000.

http://www.standard.co.uk/business/business-news/autumn-statement-uturn-on-allowances-will-help-small-firms-8386468.html

steve@bicknells.net

Cut your Income Tax by 50% from April 2012 – Start a New Business 12

As part of the Autumn Statement, the George Osborne annouced:

From April 2012, anyone investing up to £100,000 in a new start-up business will be eligible for income tax relief of 50%. In 2012, any tax on capital gains invested in such businesses will also be waived.

http://www.bbc.co.uk/news/business-15937366

This has to great news for new businesses planned to start up next year as every new business has demand for some level of investment.

steve@bicknells.net