George Osborne delivered his Autumn Statement on 5 December 2012. The key tax announcements included a crack down on tax avoidance and evasion, generally positive corporate tax measures, changes to personal tax bands and cuts in tax relief for pension contributions.
Personal Tax highlights:
· For 2013/14 the personal allowance will increase by £235 more than previously announced and will now be £9,440.
· The Higher Rate income tax threshold will increase to £41,865 in 2014/15 and £42,285 in 2015/16. As announced in the 2012 Budget the Higher Rate threshold will decrease in April 2013 from it’s current level of £42,475 to £41,450 which, according to the Treasury, will drag an additional 400,000 people into the 40p rate of tax.
· The Capital gains annual exempt amount will increase to £11,000 in 2014/15 and by 1% to £11,100 in 2015/16.
· The IHT nil rate band (which has been frozen for several years) will increase from £325k to £329k in 2015/16.
· As announced on 8 October 2012 the Government has introduced a new employee shareholder status. Employee shareholders will have different employee rights to other employees and will receive a minimum of £2,000 of shares. The Government will introduce legislation to exempt gains on up to £50k of shares acquired by employees taking up the new employee shareholder status from April 2013. The Government is also considering options to reduce income tax and NICs liabilities that arise when employee shareholders receive their shares.
· The previously announced fuel duty increase of 3.02 per litre which was due to take effect in January 2013 has been cancelled.
· From 2014/15 the lifetime allowance for pension contributions will reduce from £1.5m to £1.25m and the annual allowance will fall from £50k to £40k.
Corporate Tax highlights:
· The main rate of corporation tax will now be 21% from April 2014 rather than the previously announced 22%. The main rate of corporation tax is currently 24%, will fall to 23% in April 2013 and 21% in 2014.
· The capital allowances annual investment allowance will increase for 2 years from 1 January 2013 from £25,000 to £250,000.
· As previously announced in Budget 2012 the Government will introduce corporation tax reliefs from April 2013 for the video games, animation and high technology TV industries, subject to state aid approval.
Measures to tackle Tax Avoidance and Evasion:
· HMRC will create a unit dedicated to tackling offshore evasion and a comprehensive offshore evasion strategy will be announced in the spring.
· As previously announced the UK’s first ever General Anti-Abuse Rule (GAAR) will be introduced to provide a significant new deterrent to abusive avoidance schemes and strengthen HMRC’s means of tackling them. Guidance and draft legislation on the GAAR will be published later in December 2012.
· 4 tax avoidance loopholes will be closed down immediately.
· HMRC is conducting a review of offshore employment intermediaries being used to avoid tax and NICs and will provide an update on this work at Budget 2013.
· The Government are consulting on the introduction of significant new information disclosure and penalty powers to target the promoters of aggressive tax avoidance schemes.
For further information/advice on any issues discussed in this article please contact Sarah
t: 01932 830664, e: sarah.brock@wardwilliams.co.uk
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