When Chancellor George Osborne delivered his combined Autumn Statement and Spending Review to the House of Commons, it contained a number of surprises, not least of which was the announcement of a U-turn on the planned changes to the taper and threshold rates for tax credits, which will now remain unchanged. The Chancellor also unveiled key announcements of significance to individuals, some of which are outlined below.

State Pension

The Chancellor confirmed that the starting rate for a full new State Pension will be set at £155.65 per week, to take effect in April 2016. The basic State Pension will be increased by the ‘triple lock’ for 2016/17, meaning a full basic State Pension will rise to £119.30 a week – an increase of £3.35.

Pensions auto-enrolment

The Government will delay the next two scheduled increases in automatic enrolment minimum contribution rates by six months each, to align these changes with the start of the tax year.

Inheritance tax

Legislation will be introduced in Finance Bill 2016 to ensure that a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.

Tax-free childcare

The upper income limit per parent will be lowered from £150,000 to £100,000 and the minimum income level per parent will be increased from the equivalent of eight hours to 16 hours at the National Living Wage.

Help to Buy

As part of the Government’s ‘five point plan’ for housing, the Chancellor announced the extension of the Help to Buy: Equity Loan scheme to 2021 and the creation of a special London Help to Buy scheme which offers a 40% equity loan.

Stamp duty and second properties

The Chancellor announced additional measures affecting owners of second properties. From 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will be charged on purchases of additional residential properties (above £40,000), such as buy-to-let properties and second homes. In its draft Budget in December, the Scottish Government confirmed that similar changes will be applied to the Land and Buildings Transaction Tax (LBTT) in Scotland. These higher rates will be three percentage points above the current rates of duty.

The higher SDLT rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making ‘significant investments in residential property’.

Meanwhile, the Government intends to consult on changes to the SDLT filing and payment process to come into effect in 2017/18, including a reduction in the filing and payment window from 30 days to 14 days.

For more information on how the measures could affect your business, please contact us on 01865 292200 or email contactus@shawgibbs.com.