The Chancellor George Osborne delivered the Autumn Statement on 4 December 2014. None of the announcements were particularly significant for quoted companies. However, there were a couple that have business tax and share schemes implications that may be relevant. These include:
- Gains eligible for Entrepreneurs’ Relief are allowed to be deferred into Enterprise Investment Scheme (EIS) investments and benefit from Entrepreneurs’ Relief when the gain is realised;
- The government will not proceed with the introduction of the concept of "marketable securities" to the employment-related securities legislation.
- The government will not proceed with the introduction of an employee shareholding vehicle.
- The R&D tax credit has been made more generous – the rate of the 'above the line' credit will increase from 10% to 11% and the rate of the SME scheme will increase from 225% to 230%. The government is also launching a package of measures to streamline the application process for smaller companies investing in R&D.
- The government will reform rules for employee benefits and expenses, following recommendations from the Office of Tax Simplification.
- The government will provide a new exemption from withholding tax on interest in qualifying private placements.
- HMRC is extending its support to mid-size businesses in 2015. A new mid-size business unit will be created for specialist tax help, which includes temporary access to a named-individual for mid-size business that are transitioning through a key business change with significant tax implications.
In the Quoted Companies Alliance's response to the Statement, we noted that Chancellor could have done more to help growth companies – specifically by:
- allowing the costs of raising equity to be tax deductible; and
- removing the 5% shareholding requirement to be eligible for Entrepreneurs' Relief.
Both of these measures are key proposals in our Proposals for Taxation Reform: 2015 Budget, which we will continue to campaign for in the run up to Budget next year.
