A collection of snippets from the Autumn Statement.
Income tax allowances and rates
The standard announcements were made with regard to limits and allowances. From April the Income Tax personal allowance will be £10,600, the basic rate limit will be £31,785 and the higher rate threshold will be £42,385.
National Insurance upper earnings and upper profits limits will increase to stay in line with the higher rate threshold.
There is further encouragement for employers to train, with the Government abolishing, from April 2016, employer NICs up to the upper earnings limit for apprentices aged under 25.
There were also a number of interesting and challenging changes:
Entrepreneurs’ relief
From 3 December 2014, entrepreneurs' relief is no longer available for disposals of goodwill to a related close company, where the business of a sole trader or partnership is transferred to a related company.
Research and Development
From 1 April the above-the-line credit increases by 1% to 11% and the SME scheme increases from 225% to 230%. Qualifying expenditure for R&D tax credits is also, from 1 April, restricted, so that the costs of materials incorporated in products that are sold are not eligible.
We will also see a consultation on the issues faced by smaller businesses when claiming R&D tax credits in January 2015.
Annual tax on enveloped dwellings (ATED)
Residential properties owned by a company (or other collective investment vehicle) are described as being 'enveloped'. This is because the ownership sits within a corporate vehicle which acts as a 'wrapper' or 'envelope'.
ATED is a tax charged on a company, a partnership with a company member, or a collective investment scheme which hold an interest in one or more UK residential dwelling(s) worth more than £1 million. From 1 April the following charges will apply:
| Band | Charge £ |
|---|---|
| £1,000,001 - £2,000,000 | 7,000 |
| £2,000,001 - £5,000,000 | 23,350 |
| £5,000,001 - £10,000,000 | 54,450 |
| £10,000,001 - £20,000,000 | 109,050 |
| £20,000,001 + | 218,200 |
Non-domiciled remittance basis charge
The annual charge paid by non-domiciled individuals resident in the UK who wish to retain access to the remittance basis of taxation will be increased. There is a new charge for those resident 17 out of the last 20 years. The charges are:
| UK Resident | Charge £ |
|---|---|
| 7 out of last 9 tax years | 30,000 |
| 12 out of last 14 tax years | 60,000 |
| 17 out of last 20 tax years | 90,000 |
Benefits and expenses
There are not many details yet, but we know that from April 2015 the Government will provide a statutory exemption for trivial benefits in kind costing less than £50 and that from April 2016, They will remove the £8,500 lower paid employees threshold.