UK Budget 2014: Major changes | Tax Connect Flash
On Wednesday 19 March 2014 the Chancellor delivered his 2014 Budget, the annual announcement of UK tax changes. There were few headline changes in this Budget for business taxpayers. The main rate of corporation tax will decrease to 21 per cent for 2014/2015 as announced in Budget 2013. The rates of income tax and capital gains tax are unchanged for the next financial year.
The Budget included a number of measures to tackle residential property “enveloped” in corporate vehicles, extending the existing rules to properties worth between £500,000 and £2 million. There will be a 15% Stamp Duty Land Tax (SDLT) rate on acquisition and the properties will be subject to an annual tax on enveloped dwellings (ATED). A 28% rate of capital gains tax (CGT) will be due on any gain on a disposal.
We await a consultation on the proposed taxation of capital gains of non-resident individuals made on residential property.
The Budget has announced two surprisingly aggressive anti-avoidance provisions. Firstly, the government intends to introduce a new requirement for taxpayers to pay upfront any disputed tax associated with schemes covered by the Disclosure of Tax Avoidance Scheme (DOTAS) rules or counteracted under the General Anti-Abuse Rule (GAAR). Secondly, legislation will be introduced in 2015 to allow HMRC, the UK tax authority, to recover tax and tax credit debts of £1,000 or more directly from taxpayer accounts, although we are told “rigorous safeguards” are to be put in place to ensure this is not abused.
The Budget announced broad changes to the UK pension industry to allow people much greater freedom and choice over how to access their defined contribution pensions. This has potentially far reaching implications for the financial services industry.
Finally, the Chancellor committed to bring into effect quickly the OECD proposals on international tax. The first five actions in the Base Erosion and Profit Shifting project are due for approval in September 2014.