Chartered Management Accountants

Autumn Report 2014

Key Points from the Autumn Statement 2014

The Chancellor George Osborne presented his pre-election Autumn Statement to the House of Commons on 3rd December 2014 and the UK is on the up.

  • The UK is the fastest growing economy in the G7
  • 3% growth forecast in 2014, up from 2.7% predicted in March
  • 4% growth forecast in 2015, followed by 2.2%, 2.4%, 2.3% and 2.3% in the following four years
  • 500,000 new jobs created this year. 85% of new jobs full-time
  • Unemployment set to fall to 5.4% in 2015
  • Inflation predicted to be 1.5% in 2014, falling to 1.2% in 2015
  • Deficit projected to fall to £75.9bn in 2015-6, £40.9bn in 2016-7, £14.5bn in 2017-8 before reaching a £4bn surplus in 2018-9
  • By 2019-20 Britain will have a surplus of £23bn

autumn-report

The big change was Stamp Duty.

From 4th December, Stamp Duty will be calculated as follows:

  • No stamp duty will be paid on the first £125,000 of a property
  • 2% will be paid on the portion up to £250,000
  • 5% is paid for the portion up to £925,000
  • 10% is paid on the portion up to £1.5m
  • 12% is paid on anything above that

HMRC have created a calculator to help you calculate the amount for SDLT payable

http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm

The old rates of SDLT were

Purchase price/lease premium or transfer value SDLT rate
Up to £125,000 Zero
Over £125,000 to £250,000 1%
Over £250,000 to £500,000 3%
Over £500,000 to £1 million 4%
Over £1 million to £2 million 5%
Over £2 million 7%

The effect of this change is demonstrated below

Amount Old Scheme New Scheme Gain
       125,000.00                     –                        –                   –
       150,000.00        1,500.00              500.00      1,000.00
       175,000.00        1,750.00           1,000.00          750.00
       200,000.00        2,000.00           1,500.00          500.00
       225,000.00        2,250.00           2,000.00          250.00
       250,000.00        2,500.00           2,500.00                   –
       300,000.00        9,000.00           5,000.00      4,000.00

 

Other Announcements

  • Business rates: small business rates relief will be doubled for a further year, increases will be capped at 2% and transitional rate relief will be extended for smaller properties.
  • Business rates: there will be a full review of the current business rates system to help local shops compete with online rivals.
  • Tax relief: Tax-free personal allowance to increase to £10,600 next April. Increase in higher rate threshold £42,385 next year from April.
  • National Insurance: extension of Employment allowance to include carers.
  • National Insurance: will be abolished for all apprentices under 25 from April 2016.
  • R&D tax credit: increased to 230% for SMEs and 11% for large firms.
  • New Children’s Television Tax Credit and extension of the theatre tax break to cover orchestras.
  • Entrepreneurs’ relief: gains that are eligible for entrepreneurs’ relief but which are deferred into investments under Enterprise Investment Scheme or Social Investment Tax Relief will benefit from Entrepreneurs’ Relief when the gain is realised.
  • Social Investment Tax Relief: annual investment limit increased to £5 million.
  • A new consultation on relief for indirect investment in social enterprises.
  • New Diverted Profit tax: 25% tax to be paid on profits generated in the UK by multinationals to avoid the practice of diverting profits.
  • VAT: will be refunded to hospice charities, search and rescue and air ambulance services.
  • Air passenger duty: will be abolished for children aged under 12 from 1 May 2015 and for all children under 16 from 1 March 2016.
  • Fuel duty: frozen.
  • Export: £45 million export support package for new exporters and exporters to growing economies in Asia, South America and Africa.
  • Funding for Lending Scheme: a one-year extension to the scheme until 29 January 2016 focussing on smaller firms.
  • First World War debt: will be repaid in full.
  • Pensions: the 55% tax on unused pensions at death is to be abolished meaning they can be passed on tax free.
  • ISA: savings limit to be increased from next April to £15,240.
  • ISAs: from 3 December, it will be possible to inherit an ISA tax free.
  • National Infrastructure Plan: a government programme of investment in roads to include a tunnel under Stonehenge, flood defences and new homes.
  • Housing: thousands of new homes are to be built in East London and Brent Cross and a new affordable homes programme will deliver 275,000 new homes between 2015 and 2020. There will also be a new garden city at Bicester.
  • New £10,000 government-backed loans for postgraduate students studying for Masters Degrees
  • Banks: 50% limit on profits that can be offset by losses being carried forward.
  • Non-domiciled residents: increased annual charge of £60,000 for those that have been resident for 12 of the last 14 years and £90,000 for those that have been resident for 17 of the last 20 years.
  • NHS: £2bn extra every year until 2020 for the NHS
  • GP services to get £1.2bn in extra funds from bank foreign exchange manipulation fines

 

Edinburgh Office:

Phone: 0131 516 3885
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Bonnington Bond,
2 Anderson Place,
Edinburgh,
EH6 5NP
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info@stuartfergusonaccountants.co.uk

Falkirk Office:

Phone: 01324 632500
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Office 10,
16 Melville Street
Falkirk
FK1 1 HZ
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info@stuartfergusonaccountants.co.uk