Five years since delivering his first spending review, George Osborne spent over an hour delivering his 2015 Autumn Statement. He repeatedly stated the Government’s intent to build public services, infrastructure, national defences and strong public finances.
The Chancellor showed his teeth (in smiles) as he confirmed the UK is still on track to run its first surplus in many years – estimated at £10.1bn – in 2019/20. Debt as a percentage of GDP is also estimated to fall every year, coming down to 71.3% by 2020/21 from the 82.5% forecast this year. Osborne also stressed that the promised £12bn in welfare savings would be delivered – despite the surprise complete u-turn on cuts to working tax credits. Showing that he had been listening to his critics, he announced that the tax credit taper rate and threshold will remain unchanged.
The Chancellor again showed his teeth (though in a more threatening manner) when he announced a further £800m in funding to tackle tax evasion and a new automatic 60% penalty for all cases where the General Anti-Abuse Rule (GAAR) apples. He also had bad news for future purchasers of second homes and buy-to-let properties, who will have a pay a 3% stamp duty surcharge from April 2016. We can expect a rush to complete such deals before the deadline. Further ahead, from 2019, capital gains tax on residential property disposals (where not a principal private residence) will be due within 30 days of disposal.
Osborne declared his support for British business and the continued desire to spread economic opportunities across the country, announcing 26 new or expanded Enterprise Zones and an additional £165m to provide funding for innovative businesses. Small businesses will be pleased to hear that the Small Business Rate Relief scheme is being extended by another year, but the largest 2% of companies face additional costs as a result of the new apprenticeships levy, set at 0.5% of their total wage bill.
The Chancellor’s speech always gives the big picture, with tax details emerging in supporting documentation. We look at the most significant of these in the following articles.
Tax efficient investment
Charities & taxable giving
Tax avoidance & fraud