Wow – that was a lot of information in a short space of time!
As you may, or may not, be aware, Ed and I have been down in London for the day reporting on the firm’s reaction to George Osborne’s 2014 Autumn Statement. Here’s a look at the day’s events:
I’ll start with the end, as it were, and the Stamp Duty Land Tax (SDLT) reforms. They were the ‘rabbit from the hat’, the ‘surprise package’ of Mr Osborne’s statement and will no doubt be making tomorrow’s headlines. For all the information available pre statement, a good deal of it outlined in Ed’s blog yesterday, this was not widely expected. The solicitors running around desperately trying to exchange on mansions before midnight are evidence of that!
There is still no SDLT chargeable on houses bought for under £125,000, not a terribly relevant point in current surroundings (currently looking out across the capital) but beyond that price, things have changed. There has been a reduction in the SDLT payable on purchases of residential property between £125,000 and £937,500. Whilst that’s a reduction in tax for any house I’m ever likely to buy, it will mean higher charges for lots of our clients who will be buying houses over that tipping point and it’ll be interesting to see how things play out in the office over the next few weeks.
Besides the rates, the new rule changes to combat the unfair aspect of the old system – where you would pay 3% tax, for example, on a property bought for £250,000 but 4% if the purchase price were just a pound more – make sense. Now you will pay rates on amounts up to a certain point, much like income tax, which is a lot more rational. Ed’s key points blog has more information.
Another question is which rates we’ll be using for 2015 exams – but we’ll cross that bridge when we come to it.
Before the Chancellor had reached the end of his speech all had gone pretty much as I’d expected, having attended the Budget announcement in March. Ed’s train to London arrived as scheduled this time around so we were all set up in a Euston boardroom ready for events to unfold before the coverage had started.
As 12.30 approached, people started to flock into the room ready to provide their analysis. One of the great things about attending days such as this is seeing the firm’s most successful people (some of which are instantly recognisable, others less so due to their lower profile/older headshots on the intranet) at work. Clients, press and intermediaries alike are waiting to hear their opinions and potential impacts which are formed almost immediately on hearing Mr Osborne’s plans. Head of Tax, Jonathan Riley (@JONATHAN_RILE) also joined us on a big screen from Sydney – where he is working with some Asia Pacific colleagues – highlighting Grant Thornton’s global presence, how easy today’s technology makes communication and his late night dedication to the cause.
Much of the other content in the statement was as expected, including the general rowdiness of the MPs who had to be quietened down by the chairmen like school children not listening to the person taking assembly on more than one occasion.
The Chancellor started by spreading good news regarding the economy, delivering positive statistics (a key theme) around growth, unemployment and inflation. He also gave lots of forecasts, some of which looked years into the future. How accurate those forecasts are, is up for debate – especially given how different current results have been from what was predicted previously.
Borrowing was a key section of the report – with Labour keen to press home those statistics. Essentially, our deficit is going down but not as quickly as the Government had promised/hoped. A surplus is projected for 2018 but for ‘projected’ read ‘forecasts’ above.
To answer another political hot topic, a ‘Google tax’ has been introduced. This will attempt to impose a 25% tax on profits that are shifted outside the UK – by companies such as Google or Starbucks, which dominates much of the tax content that we see in the tabloids.
Fuel duty has been frozen, good news for all that have been enjoying filling up at the pumps! The NHS will be getting the additional £2bn in funding that was predicted and the personal allowance is to be increased by another £600 for the 15/16 tax year – another £120 in the pockets of us trainees (to the bar…).
Those of you who had a look at our wish list will know that Grant Thornton got our wish as National Insurance contributions were abolished for those employers employing young apprentices. One other thing that you might have heard about is the option to get a student loan of up to £10,000 for post-graduate study. Whilst a welcome reform this only comes in for 2016/17 and so most of you are unlikely to see an advantage personally.
Once the SDLT announcement had rounded off Mr Osborne’s speech, the room shot to work – people pulling together analysis and comment to provide to the rest of the firm, as well as our wide variety of clients.
It’s been a busy day, but enjoyable as always. Hopefully you’ll have enjoyed following our coverage – if you have any thoughts or questions then please let us know.
For Ed and I it’s back to the day job tomorrow. With all that has been announced today, I have a feeling that there’ll be lots of clients to advise and lots of work to be done…