In March 2013, George Osborne’s job security looked similar to that of a Premier League manager. Talk was of a triple dip recession, government borrowing was stuck at £120bn and the Office for Budget Responsibility was running out of red ink for its projections.
Nine months later, the Chancellor was able to present his Autumn Statement having avoided the triple dip recession and with economic recovery seemingly on a solid footing. He could even talk of a budget surplus being in sight, albeit not until 2018/19. There the rosy picture stopped: 18 months before a general election is not the time for giveaways. Thus the raft of announcements and re-announcements ended up as tax-neutral. The main points of interest were:
- The personal allowance will increase to £10,000 in 2014/15 and the higher rate (40%) tax threshold will increase by £415 to £41,865
- There will be a new transferable tax allowance of £1,000 for married couples and civil partners from April 2015.
- From 6 April 2015 employers will no longer pay Class 1 National Insurance Contributions on earnings paid up to the Upper Earnings Limit to any employee under the age of 21.
- The final exemption period for private residence relief will be halved to 18 months from April 2014 while from April 2015 capital gains tax will apply to future gains on residential property owned by non-resident individuals.
- The overall annual Individual Savings Account (ISA) subscription limit for 2014/15 will rise to £11,880, of which £5,940 can be invested in cash.
- A raft of specific employment anti-avoidance measures were announced, mostly aimed at arrangements designed to disguise employment.
New ‘simplified’ IHT rules for trusts will be introduced from April 2015, following further consultation.