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The 2015 Autumn Statement: some key measures
When Chancellor George Osborne delivered his combined Autumn Statement and Spending Review to the House of
Commons, it contained a number of surprises, not least of which was the announcement of a U-turn on the planned
changes to the taper and threshold rates for tax credits, which will now remain unchanged. The Chancellor also
unveiled key announcements of significance to businesses and individuals, some of which are outlined below.
Business measures
Business rates
The Government will extend the doubling of Small Business
Rate Relief for a further year from 1 April 2016. The Chancellor
also confirmed that the Government’s review of business rates
is ongoing and will be reported at Budget 2016. In addition,
the Government will legislate to allow local government to keep
the rates they collect from business, give councils the power to
cut business rates to boost growth, and grant elected city-wide
mayors the power to levy a business rates premium for certain local
infrastructure projects.
Apprenticeship levy
The new apprenticeship levy, effective from April 2017, will be
set at a rate of 0.5% of an employer’s wage bill and will be paid
through PAYE. Each employer will receive an allowance of £15,000
to offset against their levy payment. This means that the levy will
only be paid on any wage bill in excess of £3 million.
Diesel company cars
The three percentage point differential
between diesel cars and petrol cars
was set to be removed in April
2016. However, it will now be
retained until April 2021, when
EU-wide testing procedures
will ensure new diesel cars
meet air quality standards,
even under strict ‘real world’
driving conditions.
Employment intermediaries
The Government will legislate to restrict tax relief for travel and
subsistence expenses for workers engaged through an employment
intermediary, such as an umbrella or personal service company.
Following consultation, from April 2016 relief will be restricted for
individuals working through personal service companies where the
intermediaries legislation applies.
Personal measures
State Pension
The Chancellor confirmed that the starting rate for a full new
State Pension will be set at £155.65 per week, to take effect in
April 2016. The basic State Pension will be increased by the ‘triple
lock’ for 2016/17, meaning a full basic State Pension will rise to
£119.30 a week – an increase of £3.35.
Pensions auto-enrolment
The Government will delay the next two scheduled increases in
automatic enrolment minimum contribution rates by six months
each, to align these changes with the start of the tax year.
Inheritance tax
Legislation will be introduced in Finance Bill 2016 to ensure that
a charge to inheritance tax will not arise when a pension scheme
member designates funds for drawdown but does not draw all of
the funds before death. This will be backdated to apply to deaths
on or after 6 April 2011.
Tax-free childcare
The upper income limit per parent will be lowered from £150,000
to £100,000 and the minimum income level per parent will be
increased from the equivalent of eight hours to 16 hours at the
National Living Wage.
Help to Buy
As part of the Government’s ‘five point plan’ for housing, the
Chancellor announced the extension of the Help to Buy: Equity
Loan scheme to 2021 and the creation of a special London Help to
Buy scheme which offers a 40% equity loan.
Stamp duty and second properties
The Chancellor announced additional measures affecting
owners of second properties. From 1 April 2016, higher rates
of Stamp Duty Land Tax (SDLT) will be charged on purchases
of additional residential properties (above £40,000), such as
buy-to-let properties and second homes. In its draft Budget
in December, the Scottish Government confirmed that similar
changes will be applied to the Land and Buildings Transaction
Tax (LBTT) in Scotland. These higher rates will be three
percentage points above the current rates of duty.
The higher SDLT rates will not
apply to purchases of caravans,
mobile homes or houseboats, or
to corporates or funds making
‘significant investments in
residential property’.
Meanwhile, the Government
intends to consult on
changes to the SDLT filing
and payment process
to come into effect in
2017/18, including a
reduction in the filing
and payment window
from 30 days to
14 days.
For more information on how the measures could affect
you and your business, please contact us.