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2013 Autumn Statement

Posted by: edwinsmith on December 9th, 2013

The Chancellor delivered the Autumn Statement on 5 December 2013 and the following are a selection of the main announcements made that affect tax rates and allowances etc. The majority of these announcements will be enacted through legislation.

Corporation Tax

  1. Simpler rules for associated companies from April 2015 when the main rate and small profits rate of corporation tax are unified at 20%.
  2. Easing rules on the restrictions of the availability of trading losses on the change of ownership of a company.
  3. From April 2014 donations of money by companies to Community Amateur Sports Clubs will be eligible for corporate gift aid.

Business Tax (Companies and self employed)

  1. Various measures to business rates including capping the RPI increase at 2% for the year from 1 April 2014 and extending the Small Business Rate Relief doubling for the year from 1 April 2014.
  2. Company car tax – to protect revenues from 6 April 2014 legislation is to be introduced to:

Ensure individuals make payment for private use of a company car in the relevant tax year; and
Ensure that where an employer leases a car to an employee the benefit is taxed as a car benefit rather than as employment earnings.

  1. From April 2015 employer national insurance for employees under 21 to be abolished for those earning under the upper earnings limit, (£42,285 per annum, £813 per week for 2015/16).
  2. Existing legislation to be amended from April 2014 to prevent intermediaries being used to avoid employment taxes by disguising employment as self employment.

Income Tax

  1. Transferable tax allowances for married couples and civil partners from 2015/16 will be introduced for couples where neither partner is a higher rate or additional rate tax payer. An individual will be able to transfer £1,000 of their income tax personal allowance to their spouse or civil partner. The transferable amount will be increased in line with the personal allowance in future years.
  2. New ISA annual subscription limits for 2014/15 of £11,880 (half of which can be saved in a cash ISA). The limits for the Junior ISA and the Child Trust Fund will also increase to £3,840.
  3. Pension saving - as a result of the lifetime allowance reducing to £1.25 million from £1.5 million on 6 April 2014, the government will introduce individual protection 2014 (IP14) so that individuals with IP14 will have a lifetime allowance of the value of their pension saving on 5 April 2014 subject to an overall maximum of £1.5million.
  4. From April 2014 income tax relief on interest paid on loans to close companies and employee controlled companies will be extended to investments in such companies resident throughout the European Economic Area.

Capital Gains Tax

  1. Private residence relief – a reduction in the final period exemption from 36 months to 18 months to apply from April 2014.
    Note - If you are selling or contemplating the sale of a residential property which has been your principal private residence for part of your period of ownership but not recently, then you may wish to ensure the sale of the property occurs before 6 April 2014 to ensure you take advantage of the 36 month final period exemption.
  2. From April 2015 capital gains tax will apply to future gains on the disposal of residential properties by non-residents.

Other measures announced include the following.

  1. Cancel the fuel duty increase planned for 1 September 2014 expected to be worth 1.61p per litre.
  2. The basic State pension will increase by 2.7% which is a cash rise of £2.95 per week for the full basic State pension.
  3. The remaining benefits and tax credits which are not being up rated by 1% as per Autumn Statement 2012  (working age tax benefits) will increase by 2.7%  in April 2014 including disability, carers benefits etc.
  4. From October 2015 a new class 3A voluntary national insurance contribution to pensioners retiring before 6 April 2016 to enable them to top up their Additional Pension records.
  5. Vehicle Excise Duty – from 1 October 2014 motorists will be able to pay by direct debit, annually, biannually or monthly although a 5% surcharge will apply to biannual and monthly payments. A paper disc will no longer be issued to be displayed on a vehicle.
  6. A limit to the average increase in regulated rail fares to RPI for a year from January 2014.
  7. New Single Fraud Investigation Service and data-matching exercise to investigate welfare fraud.

For full details see 2013 Autumn Statement

Please contact us  if you require further information and assistance.

Filed under: Autumn statement