The autumn statement and spending review did not contain much comment in the speech itself concerning taxation but what little George Osborne did say will have major repercussions for those affected by the announcements he made. As ever there were further changes relating to tax hidden away in the supporting documents published once the speech had finished.
For individuals the major changes relate to taxes payable on the purchase and sale of residential properties.
For those purchasing buy to let and holiday properties there will be an additional stamp duty land tax charge of 3% for sales completed after 5 April 2016. As yet there is no detail of how such properties will be defined.
The government also intends to reduce the deadline for filing Stamp Duty Land Tax returns and paying the related tax from 30 days to 14 days from the date of completion of the purchase of a property, with the change coming into effect in 2017.
For those selling residential properties where the capital gain is not exempt from tax because it is the sellers principle private residence, there will be a requirement from April 2019 for a payment on account of the capital gains tax due to be made within 30 days of completion of the sale. This will have to be an estimated amount because in most cases it will not be known what the exact tax liability is until after the end of the tax year in which the sale takes place, but no detail has been provided as to how the tax to be paid is to be calculated.
The government is also intending to press on with plans to digitise tax administration, and has said that by 2020 most businesses, self-employed people and landlords will have to update their HMRC digital account at least quarterly, although there are no details as to how this will be achieved.
The government also hopes to be able for the 2016/17 tax year onwards to remove the requirement for taxpayers to submit an annual tax return where HMRC holds all the information necessary to calculate their tax liability. Instead HMRC will issue an annual statement and tax demand that will create a legally enforceable debt unless the taxpayer appeals against it.
The government has announced that following consultations, for now there will be no restrictions on the use of deeds of variation for tax purposes, but that the position continues to be monitored.
There was bad news for the drivers of diesel powered company cars as the 3% supplementary benefit in kind tax charge that was due to be scrapped in April 2016 will now remain in place until at least April 2021.
There is to be a new Apprenticeship levy of 0.5% of an employers payroll cost from April 2017 that will be paid to HMRC through the PAYE system. An allowance of £15,000 per employer to be set against payment of the levy will ensure that only businesses with a payroll cost of at least £3 million will have to pay anything.
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Mike Wakeford Tax Partner, Moore Chichester |