Any Christmas Cheer from the Chancellor?

THERE was good news and bad news in the Chancellor’s Autumn Statement on 5 December.

The good news is that the economy is now growing faster than that of France, Germany or the USA.

Unemployment is falling and the government expects to borrow less than planned.

The bad news is that the UK still has total borrowings in excess of £1.2trillion and the government will add to that figure every year until 2018/19.

Even then the Chancellor intends – if of course he is still Chancellor – to use any surpluses to reduce debt, or as he put it to “fix the roof while the sun is shining”.

The chances of major tax breaks any time soon are therefore pretty slim.

There was limited good news for individuals with an increase in the personal tax allowance, taking it to £10,000 from April 6, 2014.

The point at which higher rate tax is charged will however increase only marginally and while many people have been taken out of tax altogether over recent years, many others have found themselves paying tax at higher rate for the first time.

The new tax break for married couples (from April 6, 2015) will save a maximum of £200 and will only be available to couples and civil partners who pay tax at basic rate.

There was some good news for businesses.

As announced in the March Budget, there will be a £2,000 Employment Allowance to reduce employers’ national insurance bills from April 6, 2014.

In a new measure, from April 6, 2015 employers’ national insurance will not be due on the earnings of most employees under the age of 21.

Improvements are also being made to HMRC approved employee share incentive schemes and there was a package of measures to ease the rates burden on small businesses.

The week after the Autumn Statement we had more good and bad news.

The ‘easement’ for employers reporting payroll under the RTI regime which allows them to report monthly rather than every time a payment is made will be extended to April 5, 2016 – but only for existing employers with nine or fewer employees.

New rules for partnerships involving limited companies were announced which will cause a number of businesses to review their structure.

My advice as always is to talk to an expert about how the changes will affect you.

*Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823-624450.