Chancellor’s Autumn Statement

George Osborne announced several new measures on taxation that will affect many taxpayers over the coming years.

These are mixed with a little good news hidden in with measures to collect more tax and national insurance. We will have the benefit of the increased personal allowance meaning that as from 6 April 2014 everyone can earn £10,000 before they start paying tax. It looks like most people won’t have any increase in national insurance contributions, however we are told that Self Employed people will be hit with a small increase because the Class 2 weekly contribution will be increased, we have yet to find out by how much.

There will be potential for married couples and couples in civil partnerships to enjoy a little extra tax saving by transferring up to £1,000 of personal allowance between them should either party not be using their full allowance and providing that the other party is not a higher rate (40%) taxpayer.

There is a big change to reduce the effect of the so called “Flip” for CGT purposes, this won’t be popular amongst his fellow
MP’s. The change is that the period of deemed occupation for PPR purposes after a residence has at some time been the main home will be reduced from the last 36 months to the last 18 months. This will increase the chargeable gains for people who do live in more than two homes and have been able to make a PPR election and then revert “the flip”.

We do have some welcome news for employers and the country’s youth. The prospects of young people obtaining work will be increase as the chancellor announced that Employers NIC’s currently 13.8% will not be charged on employees under 21. This takes effect from April 2015 and is in addition to the measure already announced to reduce overall employers Nic’s liability by £2,000. This measure may affect recruitment policy and thinking for some employers from late 2014 onwards.

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