Last week’s Autumn Statement (25/11/2015) cemented a number of policies already announced during 2015’s Summer Budget. With the pledge to freeze income taxes, national insurance and VAT over the course of this parliament, the chancellor needs to find an innovative ways to raise tax revenues. The increase to stamp duty for second homes and the new apprenticeship levy are this budget’s examples of this practice.
The major announcements in the Autumn statement are as follows:

Housing and property taxes

  • Stamp duty on second homes or buy to let properties to increase by 3%.
  • Capital Gains Tax due on sale of residential property to be paid (on account) 30 days after the sale date, not on 31 January following the end of the tax year in which the sale was made (from 2019).

Business taxes

  • Companies with an annual payroll of more than £3m will be subject to the apprenticeship levy of 0.5% on payroll takes (from April 2017).
  • Companies with one director as the sole employee will no longer be entitled to claim the employment allowance.

Travel expenses

  • Tax relief on travel and subsistence expenses for workers using a personal service company or umbrella company will be restricted from 6 April 2016.
  • The draft legislation is to be released on 9 December 2016 and a full update issued.

Digital accounts the future of HMRC

  • HMRC will continue to cut costs with further staff cuts (expected to be but to 45,000 from the current 55,000).
  • The phasing of digital accounts by 2020 where tax payers will be required to keep their accounts up to date on a quarterly basis was announced. No specific details have yet been released, but this a big overhaul to an already complicated tax system.
  • Our thoughts on digital accounts.

Tax evasion

VAT

  • VAT raised on women’s sanitary products (equivalent to £15m per year) will be used to find women’s charities.
  • Holds effect until EU rules are changed to allow sanitary products to be zero rated (rather than reduced rated).

State Pension

  • The basic state pension will increase by £3.35 per week to £119.30 in 2016/17.
  • The single tier state pension will begin in April 2016 at a rate of £155.60 per week. This applies to all those reaching state retirement date from 6 April 2016.

Auto-enrolment

  • Scheduled increases in minimum contributions are to be delayed by six months to bring them in line with tax years.

Savings

  • Savings income taxed at 0% will remain at £5,000 for the 16/17 tax year.
  • ISA limited will continue at £15,240.
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