BOOTH AINSWORTH COMMENT ON THE AUTUMN STATEMENT

The Chancellor of the Exchequer, George Osborne, yesterday presented his 5th Autumn Statement and the most important set of announcements (after the budget next March) before next year’s General Election.

Booth Ainsworth have issued a round-up of the more popular issues and Peter Williams, Director of Corporate Tax with Booth Ainsworth LLP, comments that “with many capital spending commitments already announced over the past week and with his target for deficit reduction this year falling short, the Chancellor had little room to manoeuver.”

Stamp Duty

The biggest changes, which affect most people will be the reduction in the amounts of Stamp Duty charged on residential property purchases. People purchasing property over £125,000 and under £925,000 will find that their overall stamp duty is reduced by the switch in calculation away from an Ad Valorem tax to a more progressive lower tax on bands.

• 0-125,000   0%
• 125,000 – 250,000  2%
• 250,001 – 925,000   5%
• 925,001 – 1,500,000  10%
• 1,500,000 – and above  12%

National Insurance – Apprentices

Employer National Insurance will be abolished for apprentices under 25 up to the upper earnings limits in an effort to promote employment of young people in apprenticeship schemes.

ISA’s on spouse’s death

A new additional ISA allowance will be available for spouses or civil partners to the value of the savers ISA when they die.

Corporation Tax

The Government will grant new powers to the Northern Ireland Executive to set the rate of corporation tax, a measure seen as meeting cross border anomalies with the Republic.

Research and Development Tax Relief

The rate of R&D relief for SME’s is to increase to 230% from 225% and the tax credit will increase from 10% to 11% from 1 April 2015.

Anti-Avoidance

Tax advantages believed to be gained on Goodwill arising on incorporation of businesses will be addressed affecting transfers from today. The measures will restrict corporation tax relief to companies and Entrepreneurs relief on the gains to individuals connected with the old business and the new company.

Tax avoidance scheme anti avoidance legislation is to be tightened again with regard to promotions of schemes and to strengthen the disclosure (DOTAs) arrangements.

Profits believed to be diverted by multi-nationals will come under a new Diverted Profits Tax of 25% from 1 April 2015 with a requirement for higher level information on global allocation of profits under an OECD initiative.

Further information about the Autumn Statement can be found here.

This email has been written by Peter Williams, Director of Corporate Tax with Booth Ainsworth LLP. 

Please contact Peter for advice or further information.