George Osborne delivered his Joint Spending Review and Autumn Statement today to a packed House of Commons.
We have summarised the main themes that may affect our clients below:
- It was announced earlier in the year that the Government would raise £5 billion from the measures to tackle tax avoidance, tax evasion and general non-compliance. Today the Government stated that they “will go further with new penalties for the General Anti-Abuse Rule”, and take “action on disguised remuneration schemes and stamp duty avoidance, and will stop abuse of the intangible fixed assets regime and capital allowances”.
- A new penalty of 60% of the tax due will be charged in all cases caught by the General Anti-Abuse Rule (GAAR).
- £800 million has been set aside specifically to tackle tax evasion; the Government believes it would pay for itself with a return of almost ‘ten times in additional tax collected’.
- As a result of digitalisation of the tax system, the Government will expect Capital Gains Tax (CGT) on the sale of UK residential property to be paid within 30 days of completion of sale, from April 2019. Clients will therefore only have a short timeframe in which to seek advice regarding applicable reliefs, such as Private Residence Relief (PRR) and to calculate the CGT charge, so clients must instruct their advisors ahead of the sale.
- It was also announced that there would be increases in Stamp Duty Land Tax (SDLT) for those who buy additional properties, such as buy to lets or second homes. The higher rates will be introduced from 1 April 2016 and will be 3% above the current SDLT rates. This will affect both UK resident and non-UK resident purchasers. This increase should not affect corporate property developers, however the Government has advised that further consultation will be required on this matter.
- In a surprise U-turn George Osborne announced that his plans for £4.4bn of cuts to tax credits would be abandoned, and the system would be untouched until it is phased out in favour of Universal Credit.
- The State Pension is also set to increase to £155.65 per week.
- It was also announced that Corporation Tax would be devolved to Northern Ireland, it has been suggested that rates could be as low as 12.5%.
- Income Tax may be devolved to Wales in the future without the need for a referendum.
For further information or if you have any questions please feel free to contact any member of the tax team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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