Its been 2 hours since George Osborne sat down and here are my thoughts:-
No new announcements which affect contractors, contrary to the rumours prior to the Autumn Statement, including alarming press articles than suggested that contractors could be forced onto the payroll after one month on contract.
No changes to IR35 however the Government is still considering responses to its recent discussion document, so changes may be announced in the future.
Dividend tax hike from April 2016 set to go ahead as announced in July
Tax relief on travel and subsistence expenses will be restricted from 6th April 2016. The July Budget stated that the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies but draft legislation will be published on 9th December 2015 so we will have to wait and see.
The Government will invest £1.3 billion to transform HMRC into “one of the most digitally advanced tax administrations in the world”, providing all businesses with an online tax account which will be updated quarterly. Most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account – more administrative burden!
Buy to lets/second homes
Stamp duty to be increased by an additional 3% for buy-to-let and second home buyers from 1 April 2016. This won’t affect existing landlords but will deter those looking to enter the market. This is on top of changes to mortgage interest tax relief due to be phased in starting 2017, and the changes to the 10% annual wear and tear allowance starting April 2016. Buy to lets, an essential source of housing, are becoming less and less attractive for investors.
Capital gains tax payments
From April 2019, a payment on account of any CGT due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal. This will not affect gains on properties which are not liable for CGT due to Private Residence Relief. This is a complex calculation and sellers could miss out on valuable reliefs if left in the hands of the Conveyancer who already has to deal with SDLT returns.
Company car drivers
Contrary to previous announcements, the diesel supplement of 3% will now not be withdrawn until 2021.