So it’s only 22 days until Christmas but more importantly for us accountants only 8 weeks until the tax return deadline! Remember that if your tax return is filed late you will still be fined £100 even if you have no tax to pay.
We have been having a wonderfully busy time at Time Accounts over the past couple of months. We have moved office and taken on 2 new employees. Plus carried out a 10 mile charity run! Next on the list, is the Brighton Half Marathon in February. Training has definitely been hampered by the terrible weather!
George Osborne has delivered his first Autumn Statement as the Chancellor of a Conservative government. After 5 years in the role, we know by now that Mr Osborne’s hands have been tied by the Liberal Democrats. After all the doom and gloom in recent weeks about the government’s borrowing requirements and the deficit, the news was in fact good: the Office for Budget Responsibility (OBR) forecast was better than expected!
This Autumn Statement has been broadly welcomed by businesses as many of the changes that businesses feared – including the end of business rate relief, the possible scrapping of Entrepreneurs’ Relief and rumours of new tax rules for contractors – failed to materialise in Osborne’s 2015 Autumn Spending Review.
Here is a summary of some of the Key Points that will affect you and your business………..
Childcare
The new scheme is available to all working parents with children under 12 from 2017.
It does not depend on the employer participating in the scheme and it is available to the self-employed.
The government will provide 20% support on childcare costs up to £10,000 per child i.e. maximum support of £2,000 per child.
Both parents living in the household must be employed and neither can earn in excess of £100,000 and must have minimum earnings equivalent to 16 hours at the national living wage.
Effectively the government will double the free childcare entitlement for three and four year olds from 15 hours per week to 30 hours per week from September 2017.
Stamp Duty
Stamp duty rates will increase on 2nd properties, such as buy to let homes.
There will now be a 3% stamp duty land tax (SDLT) surcharge on the purchase price of such properties with a starting band of £40,000, rather than £125,000.
This is expected to raise £625m in 2016/17 for the Exchequer rising steadily each year to £880m in 2020/21.
The second measure affecting buy-to-let landlords and 2nd home owners, is the requirement that from April 2019 capital gains tax due on the sale of a residential property will have to be paid within 30 days of completion.
A similar regime is already in place for the sale of residential property by a non-UK resident.
This measure will not raise additional revenue; just advance the collection of tax.
Business Rates
Small business rate relief will be extended for a further year.
Devolution
Councils will now receive the full amount of revenues from business rates, up from 50%. They will also have the power to cut their own business rates; ‘a devolution revolution’.
Tax devolution across the UK continues. This started with the Scottish variable rate, which allowed for the Scottish government to vary the income tax rate up or down by up to 3p in the pound.
In contrast, the Northern Ireland government is being given the power to lower the corporation tax rate to 12.5%, the same as the Republic of Ireland.
Not to be outdone, stamp duty land tax and landfill tax are also being devolved to the Welsh government and the requirement to hold a referendum to devolve income tax will be removed.
Pensions
The state pensions will rise by more than £3 to £119.30 a week from next April. It is the largest increase in 15 years.
The new single tier state pension will begin in April 2016, at the rate of £155.65 per week. This applies to all those reaching their state retirement date from 6 April 2016.
Tax
Each individual will have their own digital tax account. These will be created for every small business and tax payer by 2016/17.
The “Tampon Tax”, i.e. VAT levied on the sale of tampons at 5%, cannot be repealed because of EU rules. However, the £15m raised by it a year will be handed over to women’s charities.
The removal of the 3% diesel supplement for company cars will be postponed until 2021.
Apprenticeships
By far the biggest revenue raiser in the Autumn Statement 2015 is the apprenticeship levy.
This is set to bring in more than £3bn a year by 2020/21.
The levy will be 0.5% of payroll costs and will affect employers with a payroll over £3m from April 2017: there will be a £15,000 allowance which will eliminate any liability for employers with payrolls up to that amount.
The government estimates that the levy will only be paid by 2% of employers.
The levy will be collected via PAYE alongside income tax and NIC. A connected persons rule will apply, similar to the employment allowance connected persons rule, to ensure that employers with multiple payrolls can only access one £15,000 allowance.
Conclusion
This was another strong performance from a bold Chancellor and given the tight constraints that the Chancellor was working to, small businesses will be pleased that he has listened to their concerns.
In terms of actual tax measures, this time around there were mercifully few announcements.
Nevertheless, next week the draft Finance Bill clauses will be published which, when enacted in 2016, will add yet more complexity to the UK tax system. On top of that, we expect that the 2016 Budget will see further and more substantial tax changes.
Important dates for your diary – Key dates coming up. Tax returns filed online have a deadline of 31 January 2016. Company accounts with a 31 March 2015 year end need to be filed at Companies House by 31 December or a £150 fine will be incurred for late filing! Quarter ended November VAT returns to be filed and paid by 7 January and November PAYE to be paid by 19 December.
I hope you found this article useful. Please remember to interact with me and let me know if you want anything covered in the next article.
My email address is hannah@timeaccounts.co.uk or you can follow my firm on Twitter @timeaccounts or visit our business Facebook page (Facebook/timeaccounts). Remember to like our page so you can keep on top of tax saving tips, deadlines and general Time Accounts updates.
See you next month. New Years column coming Thursday 7 January 2016!
Time Accounts t/a Time Business Services are a local Sussex based chartered accountancy practice dealing with all aspects of small, medium enterprises and their financial requirements, so just pick up the phone and call 01273 446595 or send us a call back request via our website Time Accounts and we’ll do the rest!
