Autumn Statement – What changes to expect in 2014 – 2015?

There were a few surprises among the array of consulted and well-trailed announcements in
the Chancellor’s speech:

  • The personal allowance will increase to £10,000 in 2014/15.
  • The higher rate (40%) tax threshold will increase by £415 to £41,865.
  • A transferable tax allowance of £1,000 will be introduced for married couples and civil partners from April 2015.
  • From 6 April 2015 employers will no longer pay Class 1 national insurance contributions on earnings paid up to the upper earnings limit to any employee under the age of 21.
  • In October 2015 a new class of voluntary NICs (3A) will be introduced to allow pensioners who reach state pension age before 6 April 2016 to top up their Additional Pensionentitlement.
  • The overall annual individual savings account (ISA) subscription limit for 2014/15 will rise to £11,880, of which £5,940 can be invested in cash.
  • The final exemption period for private residence relief will be halved to 18 months from April 2014.
  • From April 2015, capital gains tax will apply to future gains on residential property owned by non-resident individuals.
  • Legislation to block venture capital trust (VCT) enhanced buyback schemes will take effect from April 2014.
  • New ‘simplified’ IHT rules for trusts will be introduced from April 2015, following further consultation.
  • The 2014 business rates increase will be capped at 2% and smallbusiness rate relief will be extended for another year to April 2015.
  • The investment limits for share incentive plans will rise to £3,600 for ‘free’ shares and £1,800 for ‘partnership’ shares from April 2014. The SAYE limit will double to £500 per month.
  • A raft of specific employment anti-avoidance measures were nannounced, mostly aimed at arrangements designed to disguise employment.
  • The 2013 Autumn Statement was more of an economic statement than its predecessors. In part this was because, for once, the Chancellor was able to say that his spring Budget forecasts had been too pessimistic.

Politics was also an important factor in the statement, with the next election now just 18 months (and two Budgets) away. Overall, the Chancellor’s actions will not alter the government’s tax take,
although achieving that balance requires over £1.5bn to be raised in 2014/15 from the proposed new measures against avoidance, fraud, error and debt.