Autumn Statement 2015

There were a number of tax and non-tax announcements with some taking effect immediately with others being staggered or delayed.

Corporation Tax and Business Tax

Capital Allowances anti-avoidance

Proposals were introduced (with immediate effect) to prevent businesses obtaining tax advantages  by manipulating disposal values (by using artificially low values) which would normally result in excessive capital allowances claims.

Corporation Tax: related party rules, partnerships and transfers of intangible assets

Measures were introduced with immediate effect that clarify when intangible fixed assets held by a partnership come within the intangible fixed asset (“IFA”) regime. The measure will affect companies holding intangible fixed assets through a partnership, including a Limited Liability Partnership.

The changes therefore make it clear that transfers of intangible assets to a partnership with companies as members will not circumvent the Intangible Fixed Asset commencement rules that would otherwise apply to those corporate members.

Corporation Tax – Loans made to charitable trusts

Changes were made recently to s455 tax regime were loans made to trustees by close companies (broadly companies controlled by 5 or fewer participators) were potentially liable to this 25% tax if certain conditions were met. However, new loans or advances made on or after 25 November 2015 by close companies to trustees of charitable trusts will be made exempt from the s455 regime (subject to Parliamentary approval).

Personal Taxation

Capital Gain Tax (“CGT”) payment window

From April 2019, taxpayers will be required to make a payment on account on any CGT due on the disposal (e.g. sale) of residential property. The payment on account will need to be made within 30 days of completion.

Car benefit changes for diesel vehicles

It was announced in Budget 2015 that the 3% diesel supplement for diesel cars will be removed from April 2016. This would have meant that petrol and diesel cars will be treated as the same in terms of calculating the private car and fuel taxable benefit charge.

The abolition of the diesel supplement will be delayed until 2021.

Tax Credit transitional rules

There were a number of Tax Credit changes announced that were going to take effect from April 2016 as Universal Credit was going to be phased in. The changes to Tax Credits planned next year will not go ahead.

Stamp Taxes

Stamp Duty Land Tax (“SDLT”) rate increase for buy to let properties

The Chancellor announced that from April 2016, people purchasing additional properties including buy to let properties and second homes will have to pay an extra 3% SDLT above the current rates.

An exemption will be introduced for corporates owning more than 15 residential properties.

Filing of SDLT returns and payments

The deadline for filing appropriate SDLT forms (not just for buy to let) and making payments will be reduced from 30 days to 14 days. This will take effect from 2017 to 2018 although there will be a consultation.

Other Tax Measures

Council Tax

Councils will be given the powers to add 2% on their council tax bills to pay towards local social care requirements. This additional 2% levy is optional and the decision to use these powers will be down to the discretion of each council.

Small Business Rate Relief

The small business rate relief will be extended for another year.

Making Tax Digital and Digital Tax Accounts

The government announced that they are planning the replace tax returns with digital tax accounts.  Most businesses, self-employed individuals and landlords will need to keep track of their tax affairs digitally and update via their digital tax account at least quarterly.

HMRC will introduce free apps and software that link securely to HMRC systems and provide support to those who need help using digital technology. This will not apply to individuals in employment, or pensioners, unless they have secondary incomes of more than £10,000 per year.

The government will publish its plans to transform the tax system shortly and will consult on the details in 2016.

New Penalties for General Anti-Abuse Rule (“GAAR”)

The GAAR was a proposal introduced by the coalition government to try and prevent abusive tax arrangements. New penalties (details including introduction date are not as yet) will be introduced.

Non-tax announcements

Apprenticeship Levy

It was announced on the Summer Budget in July that an apprenticeships levy will be introduced for large employers.

The levy will be set at 3% of the employer’s pay bill and will take effect from April 2015. However over 98% of businesses will be exempt as a £15,000 allowance will apply which means that the levy will only be paid by employer’s pay bill over £3 million.

Basic State Pension

The basic state pension will increase from April 2016 to £119.30 a week. This is an increase of £3.35 per week.