Skip to navigation
Skip to main content
Skip to footer

To give you the best and most secure online experience possible, our website uses cookies. Continue to use the website if you're happy with this, or find out how to manage cookies.

Articles by Tony Levene

Budget Boost

Autumn statements tread an uneasy line between political position and financial finesse – even more so just a few months before electioneering moves into top gear.

The winners grab the headlines. Surprisingly, most of the losers did too – consisting as they do of those out of public favour such as banks, foreign internet giants many of which pay little UK tax, and “non-doms” - (people who live in the UK but are legally domiciled elsewhere).

Those who emerge well have votes, those that will have to pay more, do not. But beyond winners and losers, there are little-noticed elephants in the room.

Those who did well

  • Home purchasers – out goes the absurdity of stamp duty on a £251,000 home costing more than three times that on a £250,000 sale. Any major tax change creates winners and losers – here the only losers are the two per cent who pay more than £937,500 for a property. The unanswered question is whether buyers or sellers will gain.
  • Income tax payers – the personal allowance moves to £10,600 for 2015-16, nearly £4,000 more than in 2009-10. And the level at which 40 per cent tax is due also rises, taking 138,000 out of higher rate tax, reversing the trend.
  • Drivers – fuel duty remains unchanged at 57.95p per litre, its 2011 level. The unanswered question is how the Treasury will make up for the loss in VAT (the other element in the tax take on petrol and diesel) now that pump prices are falling.
  • ISA holders – the maximum that can be held in a tax free individual savings account rises from £15,000 to £15,240 from April 2015. And surviving spouses/civil partners can inherit their former partners' ISAs and retain the tax benefits – the typical ISA held by someone over 55 is around £29,000.
  • Young fliers – children under 12 will no longer pay Air Passenger Duty from next May, while the under 16s will not pay from 2016. This will save £13 per ticket on European flights in economy class – up to £97 on long haul.
  • Orchestras and hospices – anomalies where theatres could claim tax breaks but orchestras could not has ended. And charity sector hospices will get the same VAT concessions as NHS facilities.

Quotation MarksBeyond winners and losers, there are little-noticed elephants in the room.Quotation Marks

Those that did badly

  • Banks – they will see their ability to set off past losses against future profits curtailed. This could raise £4bn over five years although the Office for Budget Responsibility casts doubt over this figure.
  • Multinationals – many have sidestepped corporation tax by ensuring that costs arise in the UK but profits occur in low tax areas elsewhere. The plan is that they will pay 25 per cent tax on profits arising in the UK but diverted aboard. This could help level the tax playing field between offshore and onshore retailers.
  • Non-doms – the UK's tax concessions to long term residents legally domiciled elsewhere, an arrangement virtually unique to this country, comes at the price of an annual charge. This will rise from £30,000 to £90,000 for some.

Elephants in the room

  • The least well off – there's little or nothing for this group. They tend not to buy homes, drive much, take overseas holidays or have ISAs. Income tax allowance increases do not help those on low wages or benefits as they do not earn enough to pay income tax. The long promised overhaul of the income tax/national insurance interface whose present structure hits the low paid proportionately harder remains a work in progress.
  • Inheritance tax – other than the low cost adjustment to ISAs, there is no sign of the promised reform to a tax that will hit more estates as house and other asset prices rise.

What would you like to hear about from Tony?

Please email your suggestions to: