Highlights from the Autumn Statement 2013

11 December 2013

UK news

The Autumn Statement delivered by the Chancellor of the Exchequer on 5 December 2013 was structured to provide a balanced recovery following the recent economic recession.

The UK government promises to continue assisting companies to grow, to provide the youth population with further skills to enable them to succeed within the growing UK job market and to help working families with their everyday living costs.

In terms of encouraging UK business growth the main aspects of the statement were:

  • Employers’ national insurance contributions will be abolished from April 2015 for anyone employing a young person under the age of 21 who is earning less than £813 per week. This is to encourage employment of the younger generation and enable the job market to grow by attracting a lower employment cost overhead
  • Various measures are to be taken to  help UK businesses expand into global markets and to improve awareness of the unique and competitive advantages available for foreign investors in the UK
  • Increased investment into the British Business Bank which is providing support for SMEs as they face continued challenges in accessing credit - which is essential for longer term investment and growth
  • Continued support for the programme of planned corporation tax cuts, set out in the Corporate Tax Roadmap published in 2010 to support investment both now and in the future.

Anti-avoidance legislation was announced in line with the government’s commitment to create a ‘fair’ tax system. This affects the allocation of excess profits in relation to mixed partnerships to prevent individuals from taking advantage of loss relief.

In addition, two changes affecting the Controlled Foreign Company (CFC) finance company provisions were outlined. The first impacts on companies which transfer profits and receive a benefit from the current CFC finance company exemption by way of a transfer from existing intra group receivables to a CFC. The second extends an existing anti-avoidance provision; it prevents companies from benefiting from the exemption if the funds borrowed are used in whole or in the main to repay a debt via an offshore CFC.

With regards to personal taxes the Chancellor announced measures which will see capital gains tax being charged on properties being sold by non-UK residents as of April 2015. However, they will only be taxed on the increase in value after April 2015. See our recent article on personal taxes here.

Principle private residence relief on properties which have been an individual’s only or main residence for part of the duration of ownership will be restricted.  Currently, the final 36 months of ownership count automatically for the relief but this will be cut to the final 18 months for disposals from 6 April 2014.

With effect from April 2014, individuals will qualify for income tax relief in relation to the interest paid on loans to private trading companies resident within the European Economic Area (EEA). This is an extension of a relief currently only available for loans to UK private trading companies and aims to promote investment opportunities.

The statement also advocates employee investment with an increase to the tax-free limits available to an employee purchasing shares under government approved Share Incentive Plans and Save as You Earn plans.

If you would like to speak to one of our specialists in relation to the above or if you have any other relevant queries click here.

 
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