The Chancellor in his Spring Statement on 13 March 2019 announced a number of tax matters.
Papers published that day refer to:
- Structures and Buildings Allowance – Regulations have been published for comment, in the form of a draft statutory instrument under S.30 Finance Act 2019. The government intends to lay this before Parliament early this summer. It will apply to construction expenditure incurred after 28 October 2018.
- Making Tax Digital (MTD) – MTD record keeping for VAT for businesses over the VAT threshold (with turnover over £85,000) comes into force from 1 April. The government says it will apply a light touch approach to penalties in the first year of implementation. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued. The focus will be on supporting businesses to transition. The government will therefore not be mandating MTD for any new taxes or businesses in 2020.
- Apprenticeship Levy – From 1 April 2019, the co-investment rate will be cut from 10% to 5%, and the amount employers can transfer to their supply chains would increase to 25%.
- A policy paper reporting HMRC’s view on ‘tackling tax avoidance, evasion, and other forms of non-compliance’.
To be published by 30 March 2019 is:
- A report, as required by Section 95 of Finance Act 2019, comparing the time limits for the recovery of lost tax involving an offshore matter, with other time limits, including those provided for by Schedules 11 and 12 to the Finance (No. 2) Act 2017. In the report the government will set out the rationale for the ‘Loan Charge’, the charge on disguised remuneration (DR) loans legislated in Finance (No. 2) Act 2017 and its impacts.
To be published ‘in the coming months’ are:
- A consultation on the changes to capital gains tax main residence exemption, as affected by lettings relief and the final period of ownership, as announced at Budget 2018.
- A document inviting technical comments on the draft regulations to restrict National Insurance Contributions (NICs) Employment Allowance to businesses with an employer NICs bill below £100,000.
- Draft Enterprise Investment Scheme approved funds guidelines for comment alongside draft legislation.
- A consultation on preventing abuse of the R&D tax relief for small- or medium-sized enterprises, focusing on how the measure will be applied, to minimise any impact on genuine businesses.
- Draft regulations in respect of offshore receipts in respect of intangible property to ensure the provisions apply as intended, and draft guidance relating to the practical application of the measure
- A call for evidence on Insurance Premium Tax to show where improvements can be made to ensure that it operates fairly and efficiently.
- HM Treasury’s findings and recommendations to ensure the right VAT continues to be paid and collected in the Isle of Man. Following the Paradise Papers allegations, the Isle of Man Government invited HM Treasury to review its VAT administration processes for the importation of aircraft and yachts.
- A discussion paper launching a review of the Aggregates Levy, including the Terms of Reference, information on timing and scope of the review as well as membership of an expert working group.
- Draft regulations in respect of Hybrid and other mismatches to update the definition of regulatory capital instruments that are entitled to an exemption within the hybrid mismatch rules.
- A technical note alongside draft legislation on minor procedural and technical changes to the General Anti-Abuse Rule (GAAR) legislation to ensure that it works as intended.
- A consultation on maturing Child Trust Funds (CTF) including draft regulations to ensure that CTF accounts can retain their tax-free status after maturity.
- A policy paper exploring a potential reform to VAT refund rules for the Public Sector to reduce administrative burdens and improving public sector productivity.
- A call for evidence on potential simplification and improvement of the VAT Partial Exemption regime and the Capital Goods Scheme to ensure they are as simple and efficient for taxpayers as possible. This follows on from the recommendations of the Office of Tax Simplification, who have looked in detail at our VAT system and possible areas for improvement.
- A consultation seeking evidence on the likely impact of requiring diesel-powered private pleasure craft to use full duty paid heavy oil (white diesel), replacing the existing system where they use marked gas oil (red diesel) but pay the white diesel rate of fuel duty.
- A call for evidence on the use of the Social Investment Tax Relief scheme to date, including why it has been used less than anticipated and what impact it has had on access to finance for social enterprises.
The government is also to publish responses to the following:
- A technical note on the introduction of Structures and buildings allowance.
- A consultation launched in February 2019, following the announcement at Budget 2018 to make HMRC a secondary preferential creditor for certain tax debts paid by employees and customers [PAYE, VAT etc] on the insolvency of a business
He will also publish summaries of responses to the following documents, launched at recent fiscal events:
- A consultation on a change to the Corporate Capital Loss Restriction announced at Budget 2018, to restrict from 1 April 2020 the amount of carried-forward capital losses a company can offset to no more than 50% of the chargeable gains arising in a later accounting period.
- A consultation on aligning the consideration rules of Stamp Duty and Stamp Duty Reserve Tax and introducing a general market value rule for transfers between connected persons.
- A consultation on the detailed design and implementation of the Digital Services Tax that will take effect from 1 April 2020.
- A call for evidence on simplifying the process of amending a tax return.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to the above. If you would like advice or further information, please speak to your usual Shipleys contact.