The government has little room to manoeuvre with lower than expected tax receipts and continued austerity, but there were a few changes of interest:
- Reform of stamp duty on domestic dwellings has for a long time seemed unfair and this was an unexpected change. It has gone from being a charge on the complete house cost to a banded charge which will take away the unfairness of paying 2% on a house of £249k to 5% on a house of £251k. This will be a saving to all homebuyers except those buying properties over £938k
- The personal tax allowance increases to £10,600, however the disparity between tax and NI continues as the NI limit is £8,112. Directors pay for 2015/16 will therefore be £675pm
- The higher rate tax band having been squeezed in recent years increases in line with the increase in the personal allowance to £42,385 (from £41,865)
- Goodwill from acquisition of the business from a related sole trader or partnership by a limited company will not be allowed for tax from 3 December 2014
There were also small changes in a number of other areas:
- Ability to transfer pension pots to beneficiaries on death of individual under 75 years
- The usual increase in ISA allowances, and retention of ISA tax advantages on inheritance from spouse or civil partner
- £2k employment allowance extended to include care and support workers from April 2015
- Small increase in R&D tax credits
- Continuation of doubling of small business rate relief for a further year from April 2015
- Continued consultation on tax avoidance schemes including use of umbrella companies
Quite often the autumn statement contains more measures than the budget itself but perhaps some more major changes will be announced in the spring budget before the May 2015 election. This is a summary of the changes as currently released but may change so you should seek professional advice before taking any steps based on the contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”