A yuletide blog from none other than our resident Tax Director, Graeme Lovell. We look back at the Autumn Statement with a Christmas Tune slant… Can you spot the link?
Are you hanging up a stocking on your wall? It’s the time that every Chancellor has a ball …
This month’s Autumn Statement was a combination of old and new, and the draft legislation in respect of both was published last week. The ‘old’ came in the form of measures already announced in March, but had since been through what is officially called a ‘consultation period’ (where HMRC invite comments, but hope there aren’t any). The ‘new‘ were measures to stop perceived tax leakage, abuses and generally provide incentives to help stimulate the economy. The big news items appear to have been inspired by George Osborne sitting in a traffic jam, listening to Christmas songs on his car radio: –
- Private Residence Relief – periods of absence of a former residence which are treated as exempt to be cut from 3 years to 18 months from April 2014 (“Last Christmas”)
- Non-Residents – all UK Residential property owned by non-residents to become subject to UK capital gains tax from April 2015 (“Away In A Manger”)
- Transferrable Personal Tax Allowance – up to £1,000 can be transferred between consenting spouses from April 2015 (“Pipes Of Peace”)
- Close Company loans to Shareholders – previous plans to change the existing rules have been put on ice (“Stop The Cavalry”)
- Limited Liability Partners – can no longer depend on being taxed as though they are ‘self-employed’ (“Fairytale Of New York”)
- Partnerships with ‘Mixed’ Partners – profits of partnerships/LLP’s with a Ltd Co partner to be ‘re-apportioned’ if profit-sharing is not ‘commercial’ (“Do You See What I See”)
- ‘False’ Self-Employment – HMRC are seeking to prevent the side-stepping of PAYE and NIC, by targeting employment intermediaries (“Walking In The Air”)
- Under-21 National Insurance Contributions – up to £42,285 of earnings will cease to be subject to employer’s NIC from April 2015 (“When A Child Is Born”)
- Employer Funded Medical Treatment – the services covered by the new tax exemption for amounts up to £500 will be extended (“While Shepherds Watch Their Flocks”)
Honourable mentions in dispatches also include changes in the IHT regime for trusts, a new corporation tax relief for theatres investing in new productions, and tax relief for debt and equity investments by social enterprises like charities and community benefit societies.
George Osborne said: “… We will secure the economy for the long term – and this statement sets out how …”. I will need a lot of convincing that that wasn’t a direct parliamentary interpretation of “Look to the future now … it’s only just beguuuuuuuun!”
