Budget 2015 – Business taxes

Umbrella Companies and Employment Intermediaries

As previously announced in the Autumn Statement the government reviewed the use of contracts which allowed some workers to receive a tax benefit on home to work travel expenses. From April 2016 there will be new restricted rules on eligible travel and subsistence costs.

National Insurance

Class 2 national insurance for the self – employed will be abolished in the next parliament together with a reform of the Class 4 which is currently collected through the self-assessment tax return. The timing and implementation of this will be consulted on by the next government.

In addition as previously announced no employer’s national insurance on employees aged under 21 from April 2015 which will also be expanded from April 2016 to include apprentices.

Tax Avoidance

Further rules on avoidance were issued as has become the norm in recent budgets.

Entrepreneurs Relief – It was announced two aspects to tackling anti-avoidance in respect of this relief. Firstly entrepreneurs relief on personal assets which are allowed provided there is a meaningful withdrawn from the business of at least 5% will apply to disposals from today. Secondly where structures are created to give small indirect stake in a business to benefit from the relief will be also be challenged specifically where the company is not trading in its own right.

Tax Avoidance Schemes

Accelerated Payment Notices – Currently accelerated payment notices are being issued and it is expected that an additional 21,000 notices are to be issued than first advised, leading to more companies paying tax up front from tax avoidance schemes.

Serial Avoiders – New tougher measures will be introduced for those who continue to take part in multiple schemes.

Farmers

The current two years farmers are allowed to average their profits over will be increased to five years from April 2016. Further details on the implementation of this will be announced in the future..

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