The Autumn Statement…
Naturally, the ‘yah boo’ nature of these House of Commons events and the mainstream press emphasising the political ramifications in priority to any economic debate, can sometimes obscure the real relevance of the Chancellor’s announcements. To be fair, much that was announced in the Autumn Statement was limited to conceptual headlines and only when more substance is revealed will serious assessment be possible, so maybe the media are right to focus on opinion polls after all? Nick Robinson 1, Robert Peston Nil.
We will leave you to make your own mind up with regard to the political point scoring, but here are a few highlights for Tax Enthusiasts who will have to wait until draft legislation surfaces to get their teeth properly into the issues (diary note on 6th December chaps!):
R&D Tax Credit
We at Nyman Libson Paul do like to a bit of R&D, so improvements to the scheme are always welcomed. The announcement of the introduction of an ‘above the line’ R&D Tax Credit in 2013 for larger companies, on closer examination, may not turn out to be quite as generous as it first sounds. Currently claims notionally increase expenses therefore reducing tax, however the idea here is that claims will directly reduce tax. In other words the amount of tax relief may not actually move, although unusable credits could be cashed in. We will have to wait for more detail, and 2013, to make judgement.
Businesses located in certain Enterprise Zones in the North and the Black Country will benefit from 100% Capital Allowances, whilst those eying up the Southampton Enterprise Zone may want to consider spending less when kitting out their new premises.
Enterprise Investment Scheme (EIS) and the all new SEIS
A new kid on the block, SEIS, or ‘EIS Lite’ as you may wish to call it, will be a mini-EIS scheme aimed at raising Seed Funding for smaller businesses. Whilst it has limits of £150,000 per company and any one individual can only invest up to £100,000, it does offer a whopping 50% tax relief on investment. Add this to the opportunity to get Capital Gains Tax exemption on a gain rolled into such an investment during 2012-13 and an investor could save up to 78% just by investing, very attractive!
We are also keen to see details of proposals to relax the rules on Connected Persons investing in EIS companies and also relaxations on the type of shares that may qualify. Meanwhile we hope that measures aimed at prohibiting sham set-up companies exploiting EIS tax relief do not end up stifling genuine EIS contenders.
Venture Capital Trusts
Venture Capital Trusts will be delighted to hear that they can now sink more than £1 million into a single company. We are told that this is to reduce the administrative burden on VCTs. Cynics will no doubt anticipate some new forms to be introduced to accompany this relaxations but we remain optimistic.
Working Tax Credits and Child Tax Credits are to remain at 2011/12 levels for 2012/13, which is unlikely to score George Osborne political points with many voters.
VAT – Low Value Consignment Relief
There have been some great bargains to be had recently from various internet sites and there may be good reason, hitherto VAT has not been sought on low value packages valued at less than £15 sent from the Channel Islands (ever wondered why when you ordered two CDs they came separately?). But all that will change from 1 April 2012, so may we recommend downloading your favourite tunes electronically from then on?
VAT – cost sharing exemption
VAT exempt bodies may choose to share services in future as a VAT exemption will be introduced with a view to benefitting organisations such as charities and universities we are told, oh hang on, aren’t banks exempt too?
Gifts of pre eminent objects
Antiques Roadshow may need re-formatting if this proposal goes ahead – tax discounts on gifts of works of art or historical objects to the nation…maybe they’ll need an accountant on the show too, can you think of one that may be suitable?
Fuel Duty and Air Passenger Duty
If you are planning taking the kids to Disneyland next year, then you may want consider driving to Northern Ireland and flying long haul from there. Well, perhaps not, but planned Fuel Duty rises are being held back whilst Air Passenger Duty has been reduced for long haul flights from Northern Ireland.
Not such good news for business jet users though, from April 2013 Air passenger Duty will be extended to Business Jets. Maybe Business Jet owners will be describing their assets as Pleasure Planes in future?
Manufactured Overseas Dividends
No, this has nothing to do with UK manufacturing jobs disappearing overseas, or maybe indirectly it does? Anyway, this anti avoidance measure has effect from 15 September 2011and seeks to avoid loss to the Exchequer from manufactured overseas dividends that have the effect of costing the UK tax repayments or reductions based on credits on tax that it has not received.
Employer Asset backed Pension Contributions
From 29 November 2011 restrictions on these contributions will come into force with draft clauses published immediately, so Tax Enthusiasts can start storming through these clauses with relish, something to keep them going until 6th December!!