Yesterday, thousands of contractors, freelancers and self-employed professionals waited with bated breath to see what George Osborne had in store for them in the Autumn Statement.
Many who had been building themselves up for a headline announcement about restrictions to travel and subsistence tax relief might have been left rather underwhelmed – though as our managing director explains, more detail is expected on 9th December.
Instead, the chancellor pulled a few rabbits of the hat, while performing a couple of U-turns along the way – most notably on tax credits. Here’s a quick rundown of the top five topics that could affect contractors.
Online tax accounts
Mr Osborne promised to make HMRC “one of the most digitally advanced tax administrations in the world” by pumping £1.3 billion into the taxman’s coffers. It’s hoped the new system will provide all small businesses with an online tax account by 2020.
Capital Gains Tax
Once the online tax accounts come into force, Capital Gains Tax (CGT) will need to be paid within 30 days of the sale of any residential property. The new regime will come into force from April 2019 and replace the current system that requires CGT to be settled up on the 31st January each tax year.
Company car tax diesel supplement
The planned removal of the three percentage point difference between diesel and petrol cars has been pushed back to April 2021.
Stamp duty land tax
Anyone who purchases an additional residential property as a buy-to-let or second home from 1st April 2016 will have to fork out a higher rate of stamp duty land tax. This will be three percentage points above the current rate and affect properties valued above £40,000.
Probably the chancellor’s biggest climb down of the speech came when he scrapped his plans to cut tax credits. He claimed that the current income threshold of £6,420 and 41% taper of gross income could remain in place since they were going to be phased out by 2018.
Over to you
What do you think about the Autumn Statement? How do you think you’ll be affected as a contractor? Let us know on Twitter or by leaving a comment below.