Autumn statement 2013: Highlights

Tax breaks for small business, new measures against tax avoidance and tax incentives for investment in young people and shale gas were among the main announcements the 2013 Autumn Statement.

In his speech earlier on Thursday, Chancellor George Osborne also said that HMRC would be exempt from further budget cuts for Whitehall departments as he previewed a £9bn programme to increase the tax take by clamping down on "evasion, avoidance, fraud and error".

Employer National Insurance contributions are to be scrapped on 1.5m jobs for young people. "Employer Nics going for under 21s. Undisputed good news at last," commented BDO employment tax and rewards partner Philip Fisher in AccountingWEB's live autumn statement blog. More than 220 participants from both AccountingWEB and our sister site BusinessZone...

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Comments

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ireallyshouldkn... | | Permalink

Did anyone find the date PPR relief is reduced from 3 years to 18 months?  it is silent in para 1.295.

The data of the tax effect gives tax revenues from 2015/16 but it also give revenues from 2016.7 for non-resident CGT which is due April 2015. 

if this is April 2014 client will need to know PDQ. 

 

John Stokdyk's picture

You may need to wait until next week... or even longer

John Stokdyk | | Permalink

Thanks for pointing us at the relevant paragraph, but here on the Aweb team we have no more information on this than you.

If you're lucky, there may be draft clauses for the 2014 Finance Bill brought forward next week. But the paragraph just before the one you quote mentions a consultation on the new CGT charge for non-residents will be issued "early in 2014". It's conceivable that the consultation/exposure of the rules could be bundled together - leaving you and your client even less time to 

jon_griffey's picture

Non resident CGT    6 thanks

jon_griffey | | Permalink

 

Why on earth is the non resident CGT to be introduced from April 2015?  This will give those involved time to rearrange their affairs accordingly to mitigate its effect and it appears to only be for 'future gains' arising after April 2015.  This suggests a tax-free uplift  Why not introduce it immediately and get a tax windfall from Johnny foreigner?

.    3 thanks

ireallyshouldkn... | | Permalink

@John, thanks it wasnt just me.

@Jon, because Jon, as I just put in my circular out to clients, Gideon has lots of friends of the non-resident persuasion.

Its just like the swiss account thing.  Raised a pittance.

They are just going to sell and buy commercial which isn't in the net. 

Presumably Gideon's friends own a lot of commercial. 

jon_griffey's picture

Non resident CGT    1 thanks

jon_griffey | | Permalink

ireallyshouldknowthisbut wrote:

@Jon, because Jon, as I just put in my circular out to clients, Gideon has lots of friends of the non-resident persuasion.

 

Depressingly I think you are correct.  I can't see any other logical reason for this approach.  There must be a colossal amount of property out there owned by non residents which is heavily pregnant with capital gain.

re PPR relief changes    2 thanks

PaulCoe | | Permalink

 

This link states the new PPR rules come into effect from 6th April 2014.

https://www.gov.uk/government/news/autumn-statement-5-december-2013

.    1 thanks

ireallyshouldkn... | | Permalink

@paul super, I completely missed that document earlier. 

@Jon - I agree completely. It would have raised some real money if he had the guts to do it from today, and include commercial.  But that was never the intention the intention is to LOOK as if you are being tough in the next newspaper headline. Just as with the Swiss deal. 20% withholding tax or similar would do the job, paid by the solicitor on completion, or exchange if more than say 30 days earlier. 

The generosity of the rich    2 thanks

dww | | Permalink
  • The rich in UK are paying a greater share of their income than under previous Labour government """"

That's an odd descriptive bullet point amongst a list of action points.

I don't really understand why the point about the richest 1% paying 30% of all income tax is presented, as Osborne did today, in support of the "we're all in it together" line.  It seems to me it just highlights the increasingly grotesque income disparity that we've come to expect and accept.

If the richest get richer then they'll be paying 40, 50, 60% of all income tax.  Will that be a good thing too?

 

 

 

daveforbes's picture

CGT and non residents

daveforbes | | Permalink

There have been a couple of suggestions that bringing in of CGT for non-residents should be immediate to generate a windfall. Consider the scenario of a couple retiring to Spain 10 years ago. At the time they were considering selling their house which would not attract CGT . Their FA told them they could keep it and rent it out and still sell without CGT. Is George being soft giving them a chance to sell  ? 

Red Leader's picture

bit harsh

Red Leader | | Permalink

I think taxing the CGs from April 2015 is fair.

Remember the 6.4.65 valuation with CGT calcs of old? Even Wilson's Labour Government didn't attempt to backdate the gains that would be taxed.

Red Leader's picture

£9bn from catching tax evaders    1 thanks

Red Leader | | Permalink

I liked the comment on the FT blog. Referred to the £9bn as a "balancing figure"! Too true. Bit like closing stock ...

helping hard-working people to keep more of the money they earn    4 thanks

Vaughan Blake1 | | Permalink

Apparently there will be a grading system from 1 - 10 on next year's SATRs.  You then self-assess how hard you are working from  10 - 'very hard' to 1 'larks about and has three hour lunches'. 

John Stokdyk's picture

Comments on business breaks

John Stokdyk | | Permalink

The press releases have been flying in since yesterday's speech. The following comments arrived from some of the big firms on the business announcements:

“By spending over £1bn next year on business rates, the Chancellor has shown that he has been listening to the pain felt by businesses through a system that has its origins in the Poor Laws of 1601 and was updated in 1990 alongside the introduction of the poll tax,” said Chris Sanger, EY’s global head of tax policy.

Simon Tivey of PwC said: "The new 50% 'reoccupation' relief for small businesses on the high street could reduce the number of vacant shops but has the potential to be unfair to existing businesses who may struggle to pay full rates.

But unless it's managed properly, small businesses will move shops to take advantage of the relief will createa “merry go round of rate relief relocations,” Tivey warned. 

jon_griffey's picture

CGT and non residents    1 thanks

jon_griffey | | Permalink

daveforbes wrote:

There have been a couple of suggestions that bringing in of CGT for non-residents should be immediate to generate a windfall. Consider the scenario of a couple retiring to Spain 10 years ago. At the time they were considering selling their house which would not attract CGT . Their FA told them they could keep it and rent it out and still sell without CGT. Is George being soft giving them a chance to sell  ? 

I don't know anything about Spanish CGT but I suspect that the gain would be reportable on their Spanish tax return and Spanish CGT paid thereon anyway.  If not then this hypothetical couple would still get a substantial helping of PPR relief.  The real mischief here is that substantial foreign wealth has been pouring into UK property - espcially in London with a promise of a tax free gain - which is now appears is going to be ringfenced.  Accordng to Savills, 46% of Prime London property sales last year was to 'international buyers'.  There are always winners and losers in tax but these lost tax receipts could have been used to cut fuel duty, or small business taxes.

I do wonder if...    1 thanks

Vaughan Blake1 | | Permalink

Given all the health reports/warnings about obesity, diabetes, stress and alchohol consumption, that average life expectancy will actually start falling by 2030.

PPR Relief changes

Mitch | | Permalink

Does anyone know if there will be a transition phase for the PPR relief period change?

I have a client who moved into a care home in March 2012.  Her property (a big house bought many years ago for very little) has been on the market since then but has failed to sell.  The client and her family weren't too concerned as they thought they had plenty of time.  However, this change implies that if the property is sold on 5 April 2014 any gain will be fully exempt and if it is sold on 6 April there will be a CGT liability.  This seems very unfair as the client thought she had until March 2015 to sell and there is little chance of finding a buyer and exchanging contracts within the next 4 months.

Not aware of any transitional

Peter Cane | | Permalink

I've seen nothing about any transitional rules but something may come up over the next few weeks.

In the meantime, could your client let the property until such time as a buyer is found? This will enable letting relief to be claimed which might at least limit the potential damage of reduction in PPR?

evasion    1 thanks

oldersimon | | Permalink

Can anyone remember the last time a chancellor didn't say he was going to raise £x million by cracking down on tax evasion ?

Re Tax evasion - I am

pauljohnston | | Permalink

sure that if the Chancellor had a good look at MPs in Parliment he could raise some tax with out getting his feet wet.........

pawncob's picture

@Mitch

pawncob | | Permalink

Surely the gain would only be on one day's increase in value?

NI thresholds

Ian Lawrence | | Permalink

Has anyone found the NI thresholds for 2014/15 yet?  Am I being unobservant but cannot find them anywhere.  Thanks

PK Group's picture

Great read, and interesting    1 thanks

PK Group | | Permalink

Great read, and interesting discussion.

Helping small businesses flourish is a great step in aiding our economic recovery further. The 'Business Incentives' bullet points seem to be generally very positive, but the proof will be in the pudding as always.

PK Group

Old Greying Accountant's picture

May be ...

Old Greying Acc... | | Permalink

jon_griffey wrote:

Why on earth is the non resident CGT to be introduced from April 2015?  This will give those involved time to rearrange their affairs accordingly to mitigate its effect and it appears to only be for 'future gains' arising after April 2015.  This suggests a tax-free uplift  Why not introduce it immediately and get a tax windfall from Johnny foreigner?

... he is giving them time to sell up, creating a surplus of supply and so damping house price inflation thus simultaneously avoiding the need to increase interest rates whilst giving the indigenous population the chance of affording their own home!

JAADAMS's picture

Relevant cartoons    1 thanks

JAADAMS | | Permalink

Thanks JA, here's one just for you    2 thanks

Mouse007 | | Permalink