The Chancellor's 2015 Autumn Statement generated headlines for the reversal of tax credit cuts, but there was very little which affected small business.  This is just as well given the treatment dished out in the March Budget and the Summer Budget.

However, there were a couple of announcements which affect Buy to Let landlords.

Stamp Duty Land Tax

The rate of Stamp Duty Land Tax (SDLT) will be increased by 3% for the purchasers of second homes and buy to let properties.  This is effective from 1 April 2016.  So, for example, properties costing up to £125,000 have no SDLT, but under the changes, this will increase to 3%.  For a property costing £125,000, this will add on a further £3,750.

Payment of Capital Gains Tax

Capital Gains Tax (CGT) will become payable within 30 days of selling a residential property by 2019.  Under current legislation, CGT is collected under Self Assessment and individuals have up to 21 months after the sale of a property to pay CGT (this depends upon when the property is sold).

However, this will not affect gains on properties which are not liable to CGT due to Principal Private Residence Relief, which everyone receives on the house they live in.

Further details are available here.

The 2014 Autumn Statement was delivered by George Osborne on 3 December 2014.  As usual, there were lots of headline grabbing announcements which affect big business and individuals, such as Google tax, the ability on death to pass ISA’s onto your estate with tax protection, and the air passenger duty exemption for children.  However, we’ve identified a few which impact directly on small businesses.

Income Tax

From April 2015, the Income Tax personal allowance will increase to £10,600. The basic rate limit will be £31,785 so the higher rate threshold above which individuals pay Income Tax at 40% will be increased to £42,385.

Stamp Duty

In a major reform of stamp duty land tax (SDLT), the ‘slab’ system for residential properties (based on a single percentage rate by reference to the band in which the price paid for the property falls) will be replaced by rates for the portion of the price within each band. The thresholds and rates will also be changed. The new rates and thresholds are as follows:

Capital Gains Tax: Restricting Entrepreneurs’ Relief (ER): restricting unfair tax advantages on incorporation

The Government will prevent individuals from claiming ER on disposals of the reputation and customer relationships associated with a business (‘goodwill’) when they transfer the business to a related close company.  This will affect transfers on or after 3 December 2014.

For all relevant incorporations, on or after 3 December 2014, relief will be calculated at the time of any eventual disposal of the asset rather than at the time the expenditure is incurred.

National Insurance

The Chancellor said national insurance for apprentices aged under 25 will be abolished, benefiting around 500,000 apprentices.

Business rates

Small business rate relief will be extended until April 2016, resulting in 385,000 small businesses receiving 100% rate relief.

The Chancellor delivered his Autumn Statement on Thursday 5 December.  Whilst the headlines may have concerned the increase in the state pension age, the following are the main areas which are relevant to small businesses and taxation:

Small Business Rates Relief

The 100% relief for small business rates was due to finish in April 2014, but has now been extended to April 2015.  Any rise in business rates will be capped at 2%, whilst also offering small retailers a £1,000 discount on business rates for the next two years.

Personal Allowances

The basic personal allowance for 2014/15 will be increased to £10,000 (2013/14: £9,440).  The higher rate threshold (HRT – the sum of the personal allowance and the basic rate limit) will be £41,865 for 2014/15.

Also, from April 2015, it will be possible for spouses/civil partners to transfer £1,000 of their personal allowance to their spouse/civil partner, provided that the recipient is not liable to higher rate tax.  At a basic rate of tax of 20%, the benefit would therefore be £200.

Employer's National Insurance

Employer's National Insurance will be abolished from April 2015 in respect of those aged under 21.  However, this will be restricted to those earning less than £831 p/w.

The Chancellor delivered his Autumn Statement on Wednesday 5 December.  The following are the main areas which are relevant to small businesses and taxation:

Small Business Rates Relief

The 100% relief for small business rates has been extended by a further year to April 2014.  The relief is available to businesses with 1 property with a rateable value less than £12,000.  If you think you may qualify but don’t currently receive the relief, please contact your rates provider.

Personal Allowances

The basic personal allowance for 2013/14 will be increased to £9,440 (2012/13: £8,105).  The basic rate limit will be decreased, and the higher rate threshold (HRT – the sum of the personal allowance and the basic rate limit) will be £41,450 for 2013/14 (2012/13: £42,475).

Corporation Tax Rate

You may have seen that the rate of corporation tax is dropping, from 23% to 21% from 1 April 2014.  This is the main rate of corporation tax, which affects companies with profits in excess of £300,000.  The small business rate of corporation tax is still 20%.

Annual Investment Allowance

The Annual Investment Allowance (AIA) is the amount of investment which businesses make in plant and machinery which qualify for 100% tax relief.  With effect from 1 January 2013, the limit for annual expenditure is being increased from £25,000 to £250,000.  This is an incentive to encourage investment by SME’s in equipment.

We believe on the whol that the 2012 Autumn Statement has been positive towards small business.