Autumn Statement & Budget 2015
MCC Accountants based in Eccles, Manchester highlight the key points from the chancellors Autumn Statement and Budget 2015. As advisors to those who are self-employed and owner managed businesses, we feel the following points are most relevant.
- Income Tax Personal Allowance
The income tax allowance will increase to £10,600 from April 2015. Going forward the allowance will increase to £10,800 and £11,000 in 2016-17 and 2017-18 respectively. The basic rate limit will be £31,785 from April 2015 and there are planned increases to £31,900 and £32,000 in the following years. It is also noted that the National Insurance Upper Earnings and Upper Profits Limits will increase in line with the changes to higher rate thresholds.
- Married Couple’s Allowance, Blind Person’s Allowance and Income Limit
As widely predicted, the limits for those who are visually impaired and those couples who are married where either partner was born before 6 April 1935 are to be increased by amounts related to the Retail Price Index in 2015/16. In addition, the income limits related to these allowances will also be increased by the same measure.
- Class 2 National Insurance
The government outlines plans to abolish Class 2 National Insurance which is currently payable at a rate of £2.75/week. The exact details of the proposals are, as yet, unclear but it would appear that Class 4 National Insurance will be reformed accordingly.
- Pension Lifetime Allowance Limits
The current Lifetime Allowance for pension contributions stands at £1.25m and, as of 6 April 2016 this will be reduced to £1m. From this date, the Allowance will be linked directly to the Consumer Price Index (CPI) annually.
- VAT: Registration and Deregistration Thresholds
From 1 April 2015 the VAT registration threshold will increase from £81,000 to £82,000 and the de-registration threshold from £79,000 to £80,000 accordingly. We remind traders that the VAT thresholds are based on a rolling 12 month period and not tax year basis.
- Company Car Tax Rates
In both 2017/18 and 2018/19 the percentage of list price to tax will increase by 2 percentage points. This is applicable to cars emitting more than 75gCO2/km and is capped at 37%. In 2017-18 there will be a 4 percentage point differential between the 0-50 and 51-75gCO2/km bands and the 51-75 and 76-94gCO2/km bands. In 2018-19 this will be reduced to 3 percentage points.
- Van Benefit Charge and Car and Van Fuel Benefit Charges
The Van Benefit Charge will increase by Retail Price Index (RPI) from 6 April 2016 and from the same date the multiplier used for fuel benefits will also be increased by RPI.
- Corporation Tax Rates
For the financial year beginning 1 April 2016, the Corporation Tax Rate will be set at 20%
- Corporation Tax: Relief Restricted on Goodwill
Corporation Tax relief will be restricted on Goodwill (broadly speaking the reputation and intangible relationships related to a business) when acquired from a related party such as a sole trader or partnership which incorporates. This will affect business incorporations or acquisitions from December 2014.
- Self Assessment Tax Returns and New Payment Processes
The government has outlined plans to remove the administrative burden of annual filing of tax returns. The details of the proposals are still very much in the infancy and we await, with interest, the timeframe and proposals.
The above highlights are only a small proportion of the legislative changes that are being implemented or proposed in the coming tax years.
MCC Accountants advise a wide range of number of businesses, individuals and companies in various aspects of accountancy and tax. There are a number of changes in the following areas which require more detailed advice: Remittance Basis Charges, Capital Gains Tax, Principle Private Residence Relief, Reasearch & Development Tax Credits and much more.
MCC Accountants are established Chartered Accountants in Manchester and we always recommend employing the use of accountancy professionals to ensure legal compliance. Should you feel the need for our services in the Eccles, Salford or Manchester areas please do get in touch as we will be happy to assist.