The Autumn Statement – November
As far as personal and business tax is concerned, the Autumn Statement today didn’t have many surprises. It is supposed to be a spending review rather than a full blown budget where tax increases feature.
However, there were a few items that need to be highlighted.
Buy to let landlords
A few changes were announced in the July budget which come into effect starting in April 2017, namely the gradual restriction of interest relief over the next four years and also the abolition of the 10% wear and tear allowance.
In today’s statement, the Chancellor announced that from April 2016 Stamp Duty Land Tax (SDLT) on second homes and on buy-to-let properties will have a 3% surcharge thus making BTLs more expensive to buy at the outset. This measure is expected not to apply to companies owning 15 or more properties.
From April 2019, any disposal of a second home or BTL will invoke an immediate payment on account of CGT. Taxpayers will have 30 days from completion of the sale in which to make this payment. This is merely a cashflow change in that sellers will have to make the CGT payment possibly 20 months before they would have under current rules.
Contractors and IR35
There has been much speculation that contractors and IR35 would feature in this Autumn Statement but nothing was mentioned. IR35 remains on the statute books in its present form.
Consultations will take place to restrict relief in respect of travel and subsistence payments from April 2016.
Businesses with a wage bill over £ 3m will be subject to a new Apprenticeship Levy of ½% from April 2017.
Small Business Rate Relief
SBRR was due to be removed from April 2016, but has been extended for a further year.
Digital tax accounts
The Chancellor continues with his idea of every individual and small business to have a digital tax account by 2020. HMRC already holds a large amount of information on each taxpayer, the idea behind the digital tax account is that small businesses will have to update the records held by HMRC on a quarterly basis. This is likely to be a huge Government IT project and we have to wonder whether it will be delivered on time and on budget.