Autumn Statement December 5, 2014 12:00 am The Chancellor’s Autumn Statement on the 3rd December contained little to excite the farming industry, or indeed the wider population. With the deficit still not under control, the opportunity for giveaways was severely limited, even with the general Election only a few months away. George Osborne always seems to like one big surprise in his announcements though, and this time it was a fundamental review of Stamp Duty Land Tax. In terms of the economy, the Office of Budget Responsibility (OBR) forecasts that economic growth will be 3% in 2014. This will reduce to 2.4% next year, followed by 2.2%, 2.4%, 2.3% and 2.3% in the following four years. Despite a growing economy, the budget deficit is proving hard to close. At the start of this Parliament, the coalition’s aim was to eliminate the structural deficit by 2015. In fact, net government borrowing is due to be £95bn this financial year, and will be £75bn next year. A surplus is not forecast until the 2018-19 year. Despite austerity measures cutting spending, tax receipts have not grown in line with economic growth and the Government continues to spend more than it collects. Total national debt is therefore continuing to rise – now standing at over 80% of GDP. In terms of specific policy announcements the big change was on Stamp Duty Land Tax (SDLT). On property sales the previous ‘slab’ system where the rate was levied on the whole value of the dwelling has been replaced. instead, a progressive system much like Income Tax bands will operate. For buyers of properties under £937,500 the system will result in savings. There could be big increases for the highest value properties with a ‘top rate’ of 12% above £1.5m. This change only applies to residential property so farms should be unaffected. Other policy announcements include; the Income Tax personal allowance increase from next April will now be to £10,600 instead of £10,500 there will be an ability to transfer tax allowances between married couples and civil partners there will be no National Insurance contributions for firms employing apprentices under 25 years old (previously the threshold was 21) fuel duty will be frozen until next May Business rate relief will rise from £1,000 to £1,500 as from April 2015 to March 2016. A review of the structure of Business Rates will be conducted in time for the Budget 2016 the Budget in 2015 will contain proposals for ‘streamlining and updating’ the compulsory purchase system. This may be timely given the large number of infrastructure announcements (flood defence and roads) included in the Statement.
