UKCG Autumn Statement Summary 2014

8/10/2019 UKCG Autumn Statement Summary 2014

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UKCG Au tumn Statement

summary 2014

Measures announced in todays autumn statement of relevance to construction are:

Economic performance

Economy forecast to grow 3% in 2014, up from 2.7% predicted in March

Unemployment set to fall to 5.4% in 2015

Inflation predicted to be 1.5% in 2014, falling to 1.2% in 2015

Borrowing set to fall from 97.5bn 2013-14 to 91.3bn in 2014-15. A budgetsurplus predicted by 2018.

The OBR expects business investment growth of 7.7% in 2014

Taxation

Construction Industry Scheme (CIS)

Following consultation, the government will implement a package of improvementsto the CIS to reduce administrative burdens on construction businesses. Asummary of responses will be published shortly.

Personal taxes

The personal allowance will be increased by a further 100 in 2015-16 to 10,600.The higher rate threshold will increase by inflation (1.2%) in 2015-16.

Business taxes

Action against multinationals diverting profits overseas in order to avoid UK tax.Introduction of a new Diverted Profits Tax, to be applied at a rate of 25% from 1April 2015.

R&D tax credits - increase the rate of the above the line credit from 10% to 11%and increase the rate of the SME scheme from 225% to 230% from 2015.

Support for all businesses paying business rates by extending the 2% cap on theRPI increase in the business rates multiplier to April 2016

A review of the future structure of business rates

Apprenticeships & skills

Abolishing employer National Insurance contributions for apprentices aged under

25 on earnings up to the upper earnings limit.

Loans of up to 10,000 - for those under 30 years old wishing to undertake apostgraduate taught masters in any subject


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National Infrastructure Plan 2014

The main announcements on infrastructure were contained in yesterdays NationalInfrastructure Plan. This detailed a pipeline of 460bn of economic infrastructureprojects for delivery in the next Parliament and beyond covering both public andprivately funded.

Key points include:

15 billion of investment in the Strategic Road Network as part of a new RoadInvestment Strategy which will include undertaking over 100 major schemes to2020-21

a 2.3 billion programme of flood investment investing in over 1,400 schemes toprotect at least 300,000 homes. The government will legislate to ensure thatbusiness contributions to flood defence schemes are tax deductible.

a 38 billion Network Rail delivery programme, including electrification of key lines,and commitments to major projects such as Crossrail and HS2

continued support for digital infrastructure which will ensure that 95% of premises

have access to superfast broadband by 2017

an ambitious programme of investment in science infrastructure, including projectssuch as a new polar research ship and Met Office supercomputer

The Plan expects the majority of the infrastructure pipeline to be privately funded, withthe government taking measures to support investment. In particular:

implementation of the final stages of Electricity Market Reform to support long-terminvestment in electricity generation, with the first Capacity Market auction takingplace in December 2014 and the first Contracts for Difference being allocatedunder the enduring regime in early 2015

Full details of the National Infrastructure Plan can be found here

The UKCG press release on the infrastructure plan can be read here

Housing

Autumn Statement package includes measures which will: take forward existingcommitments for up to 42,000 homes, release public sector land with capacity for up to150,000 homes and commit to new measures to support up to 133,000 homes.

Specifically:

working with Bicester to support its plans to become a garden town, to support theconstruction of up to 13,000 homes

consulting on streamlining the process for selling shared ownership properties

approval of Londons Grahame Park, Blackwall Reach, Aylesbury Estate and NewUnion Wharf projects for funding under the 150 million estates regenerationprogramme, subject to due diligence and contract negotiations, where 8,000homes will be built

consulting on ways to increase the borrowing capacity of housing associations inrelation to the valuation of properties transferred from local authorities


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Reform of Stamp Duty

From 4 December 2014, SDLT rates for residential property will only apply to the partof the property price that falls within each band, similar to the structure of Income Tax.

New SDLT rates:

Property Value Tax rate charged on part of property price

within each tax band (%)

0-125,000 0

125,001-250,000 2

250,001-925,000 5

925,001-1,500,000 10

1,500,001+ 12

Planning

Measures to reform the planning system include:

ensuring that the principle of development need only be established once

taking steps to speed up section 106 negotiations, including revised guidance, &consulting on a faster process for reaching agreement

keeping the speed of decisions on major applications under review, with theminimum performance threshold increasing to 50% of major decisions on time asperformance continues to improve

publishing proposals for consultation at Budget 2015 on making the Compulsory

Purchase Regime faster, with the aim of bringing forward more brownfield land fordevelopment

Northern Powerhouse

Measures to support development in the North of England include:

The government, with Transport for the North, will produce a comprehensivetransport strategy for the north. This will include options, costs and a deliverytimetable for a HS3 east west rail connection, with an interim report in March 2015.

Invitations to tender for the next Northern and Trans-Pennine Express railfranchises will be published shortly.

235 million in a new Sir Henry Royce Institute for advanced materials researchand innovation, which will be based in Manchester and have satellites in citiesincluding Leeds, Liverpool and Sheffield

The government intends to set up a long-term investment fund from tax revenuesfrom shale for the North and other areas hosting shale gas developments, tocapture the economic benefits of shale gas for future generations.

Devolution

Support for devolving Corporation Tax rate-setting powers to Northern Ireland

Agreement reached with the Welsh Government on full devolution of non-domestic(business) rates policy. A fully devolved regime will be operational by April 2015.


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Energy & shale gas

A new 5 million fund to provide independent evidence directly to the public aboutthe robustness of the existing regulatory regime for shale gas.

31 million for sub-surface research test centres through the Natural EnvironmentResearch Council. This will provide research applicable to a wide range of energy

technologies including shale gas and carbon capture and storage.

Other issues

From 1 April 2015, businesses will be required to account for VAT on the actualconsideration received when prompt payment discounts are offered. HMRC willpublish a response to the recent consultation shortly.

From 1 April 2015 the government will exclude from the carbon price support rates,fossil fuels that are used by CHPs to generate good quality electricity that is self-supplied or supplied under exemption from the requirement to hold a supplierlicence.

The government will introduce an 80% levy credit for aggregate commerciallyexploited in Northern Ireland between 1 April 2004 and 30 November 2010following its importation from another EU Member State.

The government will review the increasing use of overarching contracts ofemployment by employment intermediaries such as umbrella companies. Thesearrangements enable workers to obtain tax relief for home to work travel that wouldnot ordinarily be available. The government will publish a discussion paper shortlyto inform possible action at Budget 2015.

HM Treasury and the Bank of England will extend the Funding for Lending Schemefor one year until 29 January 2016

Further information

The full autumn statement documents can be found at:

https://www.gov.uk/government/publications/autumn-statement-documents

December 2014

UK Contractors Group 83 Victoria Street London SW1H 0HW Tel: 020 7836 6636 / 6637 Email: [email protected] www.ukcg.org.uk
https://www.gov.uk/government/publications/autumn-statement-documentshttps://www.gov.uk/government/publications/autumn-statement-documentsmailto:[email protected]://www.ukcg.org.uk/http://www.ukcg.org.uk/mailto:[email protected]://www.gov.uk/government/publications/autumn-statement-documents

Documents

UKCG Autumn Statement Summary 2014