The Government announced a joint Spending Review and Autumn Statement on 25th November 2015. The main headline from the Statement was the Chancellor’s U-turn on Tax Credits, which means that low-income families, who were expecting cuts in tax credit payments of up to £1,200 per year, will no longer face that loss. However, there were also a number of key elements which will affect small and medium sized businesses.
Buy to Let Properties – from April 2016 there will be a 3% surcharge on Stamp Duty when some buy to let properties and second homes are bought.
Digital Tax Account – there will be personalised digital tax accounts accessed via free apps and software. Self-employed people and landlords will have to input their income and expenses every quarter, instead of waiting until after the end of the tax year to tell HMRC about their profits.
HMRC Assessment – HMRC will be able to send you a tax bill on the basis of the information they already hold, replacing self-assessment with HMRC assessment. This will be used where HMRC believes you have “simple” tax affairs. It will be imperative that you check the HMRC Assessment within a given timeframe; as outside that timeframe you will be liable for the amount of tax HMRC has assessed that you owe.
Small Business Rate Relief – has been extended for 12 months to April 2017.
Living Wage – we already knew that there will be a compulsory Living Wage which is basically a new minimum wage to be paid to people aged 25 and over. This Wage will start in April 2016 at £7.20 per hour, reaching £9 per hour by 2020.
If you have any queries contact Jackie or Andrew