Main Tax announcements in Autumn Statement 2015
The Chancellor has scrapped planned cuts to tax credits altogether rather than just ease their impact. The rate at which a claimant’s award is reduced as each pound of their income exceeds the income threshold (known as the taper rate) will remain at 41% of gross income from April 2016. The level of income at which a claimant’s tax credit award begins to be tapered away (known as the income threshold), will remain at £6,420 per year from April 2016.
Increased stamp duty land tax on purchase of second homes and buy to let properties
The Chancellor announced that buy-to-let landlords and people buying second homes will have to pay more in stamp duty. From April 2016, they will have to pay a 3% surcharge on the stamp duty band for the property. The stamp duty surcharge will lift each band by 3%. That means that for properties worth between £125,000 and £250,000, where the stamp duty is 2%, buy-to-let landlords will pay 5%.
Payment of capital gains tax
From April 2019, a payment on account of any CGT due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal. This will not affect gains on properties which are not liable for CGT due to Private Residence Relief. The government will publish draft legislation for consultation in 2016.
Making tax digital
Chancellor announced investment of £1.3 billion so that HMRC can be transformed into one of the most digitally advanced tax administrations in the world. The most interesting part of this announcement is that most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account.