· Off-payroll working in the private sector (“IR35”) – it is possible that the off-payroll working rules introduced in the public-sector in April 2017 will be extended to the private sector. “The legislation ensures individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company. The consultation will draw on the experience of the public sector reforms, and external research already commissioned by the government and due to be published in early 2018”
· Employment status consultation. As announced at Autumn Budget 2017, the government will publish a consultation as part of its response to Matthew Taylor’s review of modern working practices, considering options for reform to make the employment status tests for both employment rights and tax clearer.
· VAT threshold will remain at £85,000 for two years until April 2018. The Government will consult on the threshold in accordance with the recommendations from the Office of Tax Simplification.
· Late Submission Penalties and Late Payment Interest - the Government will reform the penalty system for late or missing tax returns, adopting a new points-based approach.
· Self-Assessment Debt – As of 6th April 2019, HMRC will use technology to recover additional Self-Assessment debts closer to real-time by adjusting the tax codes of individuals with Pay as You Earn (PAYE) income.
· Taxation of employee business expenses – the Government will make several changes to the taxation of employee expenses in light of the call for evidence which was published in March 2017;
· Subsistence benchmark scale rates – from April 2019, employers will no longer be required to check receipts when reimbursing employees for subsistence using benchmark scale rates. The existing concessionary accommodation and subsistence overseas scale rates will be placed on a statutory basis to provide greater certainty for businesses.
· Guidance and claims process for employee expenses – HMRC will work with external stakeholders to improve the guidance on employee expenses, particularly on travel and subsistence and the process for claiming tax relief on non-reimbursed employment expenses.
· The Personal Allowance will rise from £11,500 to £11,850 from April 2018. The Higher Rate Threshold will increase from £45,001 to £46,350. The Government is committed to raising the Personal Allowance to £12,500 and the Higher Rate Threshold to £50,000 by 2020.
· The National Living Wage and the National Minimum Wage will increase from April 2018
- 25+ £7.83
- 21 to 24 £7.38
- 18 t0 20 £4.20
- 16 to 17 £3.70
· Making Tax Digital - in accordance with the Finance (No.2) Act 2017, no business will be required to use Making Tax Digital until April 2019. Only those with turnover above the VAT threshold will be mandated in April 2019 and this will only be for VAT obligations.
· Benefits in Kind: Electric vehicles – from April 2018, there will be no benefit in kind charge on electricity that employers provide to charge employee’s electric vehicles.
· Capital Gains Tax payment window – the introduction of the 30-day payment window between a capital gain arising on a residential property and payment will be deferred until April 2020.
· Diesel company cars – a rise in the existing Company Car Tax diesel supplement from 3% to 4%, with effect from 6 April 2018 (only applicable to diesel cars which do not meet the Real Driving Emissions Step 2 standards.)
· Company cars – the Fuel Benefit Charge and the Van benefit Charge will both increase by RPI from 6 April 2018.
Other points to note that may be of interest are:
· VAT on labour provision in the construction sector - the Government will introduce a VAT domestic reverse charge to prevent VAT losses. This will effectively shift the responsibility for paying VAT along the supply chain to removing potential for it to be stolen. As of 1st October 2019.
· NICs Bill – the Government re-confirmed its earlier announcement that a series of NICs policies set to be introduced will be delayed for one year to allow time for consultation and discussion to take place. These policies include the abolition of Class 2 NICs and reforms to the NICs treatment of termination payments. The Government will also no longer proceed with the increase to the main rate of Class 4 NICs from 9% to 10% in April 2018 and to 11% in April 2019.
Avoidance and Evasion
· National Insurance Contributions (NICs) Employment Allowance – the Government has found evidence of employers abusing the Employment Allowance, often by using offshore arrangements. From 2018, HMRC will require upfront security from employers with a history of avoiding paying NICs in this way.
· Offshore structures - the Government will publish a consultation in response to the proposed requirement for designers of certain offshore structures, that could be misused to evade taxes, to notify HMRC of these structures and the clients using them.
· Extending offshore time limits - assessment time limits for non-deliberate offshore tax non-compliance will be extended so that HMRC can always assess at least 12 years of back taxes without needing to establish deliberate non-compliance, following a consultation in Spring 2018.
· Taxation of Trusts – the Government will publish a consultation in 2018 on how to make the taxation trusts fairer, simpler and more transparent.
· Disguised remuneration – in order to tackle disguised remuneration avoidance schemes used by close companies, the Government will introduce the close companies’ gateway and measures to ensure liabilities from the new loan charge are collected from the appropriate person.
· Extension of Security Deposit Legislation - the Government will expand existing security deposit legislation to corporation tax and Construction Industry Scheme deductions. These changes will be legislated for in Finance Bill 2018-19 and take effect from 6 April 2019.