Autumn Statement 2014 Commentary


Filed Under: UK Business

Earlier today, the Autumn Statement was presented to Parliament by the Chancellor of the Exchequer. Experts at Blick Rothenberg provided the following commentary:

  • Autumn Statement more like a budget announcement
“The Autumn Statement is becoming more like a budget announcement. You wouldn’t think an election was round the corner.” Nilesh Shah, Head of tax
  • Tax receipts and HMRC statistics
“The Chancellor says that tax receipts are down, but HMRC statistics appear to show otherwise. This needs to be urgently clarified.” – Nimesh Shah, Partner
  • Inheritance Tax exemption welcome
“The extension of the Inheritance Tax exemption to professionals who risk their lives fighting global diseases such as Ebola is extremely welcome, and is fair for those who put themselves on the line for humanity.” - Frank Nash, Tax Partner
  • Tax avoidance and evasion are key
"Tax avoidance, evasion and aggressive tax planning continues to be a key focus and is expected to raise £5 billion." – Genevieve Moore, Partner
  • More certainty needed for smaller companies
“Today’s infrastructure announcements at national level require much more certainty in our tax laws for smaller companies who invest in plant and capital.
The Chancellor should now announce an uplift in the Annual Investment Allowance to £2M for the life of the next parliament.” – Frank Nash, Tax Partner
  • Non-domiciliary residents
“Non-domiciliaries living in the UK are already in the top 50% of income tax payers. The Chancellor needs to tread carefully in the detail of the changes he proposes to introduce and consult widely with professional bodies.” - Frank Nash, Tax Partner
  • International corporates and overseas profits
“The fact that so called international corporates are to be taxed on overseas profits that are deemed to be earned in the UK is an expected move from the Chancellor but very difficult to measure and police.”- Nilesh Shah, Head of tax
  • Elaborate tax structures are now under attack with a new “multi-national tax”
"Elaborate tax structures are under attack with a new "multi-national tax" of 25% on profits diverted from the UK. This will impact on many multi-national businesses that have taken advantage of historical UK regimes to save UK corporation tax" - Genevieve Moore, Partner
  • Extensions to UK R&D tax credits
“Banks are now under attack with new restrictions setting losses against taxable profits. This will bring many banks into a tax paying position many years earlier than expected.
Further extensions to the UK R&D tax credits are great news for companies investing in Research and Development – this is good for Britain.” – Genevieve Moore, Partner
  • Postcode lottery not just for the NHS
“The postcode lottery is now not just for the NHS but for tax too.” – Bob Rothenberg, Senior partner

“George Osborne’s infrastructure, science and cultural aspirations could be dubbed the ‘Northern Lights’. The powerhouse is there, it just needs the investment to switch everything on!” – Frank Nash, Tax partner
  • Not clear why ISA allowances should be doubled
"It is not clear why ISA allowances should be doubled for a surviving spouse; the case for this is unclear and confusing." – Frank Nash, Tax partner
  • 138,000 people taken out of higher rate tax
“138,000 people taken out of higher rate tax with the first increase in the 40% bracket for five years is a welcome announcement but still a long way to go before the £50,000 higher rate bracket is achieved. The Chancellor gets his mansion tax and this will benefit people buying lower priced properties with huge stamp duty land tax reform.” - Genevieve Moore, Partner
  • Annual investment limit
“Nicer ISA’s get better and better with tax free status passing to spouse on death but only a small increase in the annual investment limit. Why not double it to encourage more savers?” - Genevieve Moore, Partner
  • 13.34 - Treasury should consult more widely
“The smoothing of the stamp duty bands is long overdue and has been lobbied by professional bodies for years. If the treasury consulted more widely and more frequently, then ‘unfair’ and ‘unworkable’ tax policies would be avoided." - Frank Nash, Tax partner
  • 14.32 – Preservation of the Entrepreneurs Relief
“The preservation of the Entrepreneurs Relief for gains deferred into Enterprise Investment Scheme (EIS) and Social Investment Tax Relief (SITR) investments supports the Chancellors aspirational budget. This will encourage successful entrepreneurs to invest in newer companies and society,” - Stefanie Stapleton, Assistant Manager
  • 14.58 - Tax on dividends
“Distributions by companies under "B" or "B/C" share schemes are used to enable shareholders to choose whether to receive payments as dividends or as capital gains.

The government is to tax all such distributions as normal dividends and not as capital gains from 6 April 2015. Currently, where small individual shareholders receive modest returns by way of such capital gains, no tax is payable if the amounts are below £11,000 and therefore fall within the annual exemption. Following the change such gains will be liable to tax as dividends at the effective rates of 25% or 30.6% for higher rate tax payers.” – Paul Smith, Partner