From a tax measures point of view, one could be forgiven for concluding that the Chancellor’s statement was a non-event. There really was very little in terms of substantive changes to primary tax legislation. However, what was buried in the Autumn Statement technical release notes was a raft of anti-avoidance legislation aimed not just at closing tax loopholes, but at prosecuting not only the taxpayers that take advantage of loopholes, but also the purveyors of such aggressive tax planning schemes.
It is clear that the Government has caught on to public sentiment which weighs heavily against those within society that don’t pay their fair share of taxation. The main political parties are all vying to be seen as the toughest on tax evasion and particularly tax avoidance. Hence, we are now well and truly within an environment where tax avoidance schemes are not only perceived as unfair and distasteful, but now verging on the criminal.
We have come a long way since the early to mid-2000’s when tax planning schemes were seen as a get rich quick opportunity by some and the courts were hamstrung by having to interpret legislation in accordance with the literal meaning of the wording used. Now courts are considering the spirit of the law when reaching their decisions, so HMRC are winning far more than they are losing, many of these cases dating back to the mid-2000s.
The impact of this is that tax planning boutique companies have all but disappeared (good riddance some might say) and we are now back in the position where tax planning bespoke to the specific circumstances of an individual or business is the order of the day.
We mustn’t forget that it is still enshrined in British law that we all have the right to organise our affairs to pay the minimum amount of tax relevant to our individual situation. Perhaps this should now include the caveat at the end of that statement: ‘as long as you remain within the spirit of the law’.
Changing subject, there was one area that the Chancellor did particularly focus on within the Autumn Statement. That is the matter of second property ownership, whether that be for personal use or as a buy-to-let investment. A 3% increase in stamp duty land tax for second (and subsequent) property acquisitions is clearly an attempt to level the playing field to enable first time buyers to get on the property ladder, particularly in areas perceived to be blighted by second property ownership. I suspect that this will have minimal impact, other than to raise a little more tax to attempt to close the budget deficit. Following on from the interest relief restrictions for buy-to-let landlords announced in the Summer Budget, I think we can take this to signal the beginning of a concerted attempt to ‘correct’ the property market. Good luck with that!
For specific information on tax planning, get in touch with Brian Jukes on [email protected] or 024 7622 1046