As this is the last Autumn Statement before the general election on Thursday 7 May 2015, no doubt the Chancellor will remind us of the positive tax changes to come in April 2015 and beyond.
He will trumpet the increases in personal allowances in the last four years and the promised increase to £10,500 next April. But the problem the increased personal allowances have raised is the decrease in the starting point at which higher rate taxes are payable. In what will be the five years of the current Government we will have seen the personal allowance increase from £6,475 to £10,500 but with a fall in the starting point for higher rate tax from £43,875 to £42,285. The increase is far greater than the fall but there is the argument from the Labour Party and some Conservative back benchers that 'teachers, police officers and nurses' are now higher rate taxpayers.
Which is why David Cameron, in his Tory conference speech, gave a promise to increase the starting point for higher rate tax to £50,000 by 2020 (and increase the personal allowance to £12,500). We'll see whether the Chancellor adds any more detail to this promise.
Will we expect anything to happen for businesses?
We shouldn't expect any changes to the broad landscape. A 20% corporate tax rate fall all companies will be with us from April 2015 and, under the Conservatives, one would not expect that to change. There are some areas which the Government has consulted on over the summer and for which announcements may be made. For example:
• Venture capital reliefs. The Government states 'it is committed to making the UK one of the best places to start, finance and grow a business in Europe'. The tax-advantaged venture capital schemes are an integral part of this strategy but the Government want to ensure that the schemes are focussed on higher risk investment but also responding to business and investor needs. For example there may be an announcement to explore options for EIS and SEIS to accommodate the use of convertible loans rather than equity investment.
• Construction Industry Scheme. The potential good news may be improvements to the operation of the CIS regime such as making it easier for subcontractors to obtain gross payment status. The potential bad news is the introduction of mandatory on-line CIS filing for contractors.
The media coverage of the Autumn Statement has grown over the years and sending information to your clients about the Statement and the prospective tax legislation is worth considering.
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The Chancellor will make his 2014 Autumn Statement on Wednesday 3 December.