George Osborne has delivered his final Autumn Statement before the General Election next year.
Here are 10 headlines which caught our eye:
- The personal allowance will increase to £10,600 for 2015/16.
- The 40% higher rate tax threshold will rise to £42,385 for 2015/16.
- Fuel duty has been frozen.
- Air Passenger Duty will be scrapped for under 12’s from 1 May 2015, extended to under 16’s from 1 March 2016.
- A new Diverted Profits Tax of 25% will be levied on multinational enterprises who indulge in aggressive tax planning arrangements, to divert profits from the UK. The tax will be introduced from 1 April 2015.
- A new aggravated penalty, of up to a further 50%, for moving hidden funds to circumvent international tax transparency agreements, forms part of further action to clampdown on offshore tax evasion. The changes will come into effect from April 2016, except the aggravated penalty which comes into effect with Finance Act 2015.
- Stamp Duty on residential properties has been reformed. From 4 December, Stamp Duty Land Tax for residential property will be charged at different rates depending on the portion of the purchase price falling into the new rate bands.
Purchase price of property (£) Rate of tax Up to £125,000 Zero Over £125,000 – £250,000 2% Over £250,000 – £925,000 5% Over £925,000 – £1.5m 10% Over £1.5m 12%
- Changes and increases have been made to the Remittance Basis Charge. The charge paid by people who have been UK resident for 7 out of the last 9 years will remain at £30,000. The charge paid by people who have been UK resident for 12 out of the last 14 years will increase from £50,000 to £60,000. A new charge of £90,000 will be introduced for people who have been UK resident for 17 of the last 20 years. The government will also consult on making the election apply for a minimum of 3 years.
- Corporation Tax relief is to be restricted where companies acquire goodwill from related individuals on the incorporation of a business. The restriction is designed to remove the tax benefit where, on incorporation, the individual sole trader or partnership business is transferred to a related company. It will apply to all transfers on or after 3 December 2014.
- HMRC’s compliance yield target for 2014/15 has been increased by £1.5bn to £26bn.
Author: Guy Smith, Tax Investigations Manager on the ReSource Tax and VAT Consultancy Team