Autumn 2015 statement review
Chancellor George Osborne presented the Autumn 2015 Statement on Wednesday and the media has been packed with news on police services, student nurses and tax credits. But what exactly are the main tax changes?
There are really 6 key tax announcements which individuals need to be aware of:
- Tax credits – These are benefits which are paid to those working but on low incomes to ‘top up’ pay. In the summer budget, proposals were to cut these by £4.4bn but the chancellor has (after strong public reaction) done a 180 degree turn on this proposal which has now been scrapped. The new Universal Credit system (a benefits system which merges tax credits with 5 other benefits) will go ahead however, and will put increased pressure on low income households.
- Tax free childcare – This will be cut. Currently in order to claim childcare a parent must be earning under £150,000 and working more than 8 hours a week. From 2017 the parent must be earning under £100,000 and working more than 16 hours/week.
- Stamp Duty Land Tax (SDLT)
- From 1 April 2016 higher rates of SDLT will be charged on purchases of residential properties which are not intended to be the buyer’s main home (e.g. second homes and buy to let properties); and
- From 2017 the requirements for filing and payment of SDLT are being shortened from 30 days to 14 days
- Capital Gains Tax (CGT) – as with SDLT, from 2019 CGT will be payable earlier than previously. Where a residential property (which is not the main residence) is disposed of and there is a gain, CGT will need to be paid within 30 days rather than at the end of the tax year.
- Digitisation of HMRC – Businesses, self-employed people and landlords are going to collectively become more organised, accurate and up-to-date on tax filing. £1.3bn investment will bring new technology and new requirements for such people to keep track of their tax affairs online and update HMRC quarterly via the online service.
- Pensioners
- State Pension – Good news for those receiving the State Pension; this is due to increase by £3.35 (2.9%). From April 2016 pensioners will be getting £119.30/week.
- Going abroad – currently pensioners who go abroad will continue to receive their pension credits for 13 weeks (longer if going overseas for NHS medical treatment) however that is being cut to 1 month.
Nicola Sunderland is a Trust and Estate Planning Practitioner in the Private Client team at Barker Gotelee, Suffolk solicitors
For more information on our range of legal services please call the team on 01473 611211 or email [email protected]
