Archive - publications in 2016
Check back here regularly to find out what's going on at our company and in the financial environment.
News Item - November 2016.
A brief summary of the Chancellor's Autumn Statement on Wednesday 23rd November 2016:
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The pensions money purchase annual allowance (MPAA) will be reduced from £10,000 to £4,000 from April 2017, in order "to prevent inappropriate double tax relief". This limit applies to people who have flexibly accessed their pensions and under the current rules, may be obtaining tax relief on up to £10,000 of recycled pensions income.
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The tax treatment of foreign pensions and lump sums of UK residents will be fully aligned to the same extent as their domestic equivalents. Specialist pension schemes (s.615 International Retirement Benefit Schemes) for people employed abroad will be closed to new savings. There will also be other significant changes to the tax rules for pensions of people who move overseas.
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The government renewed its previous commitments to further reduce the rate of corporation tax to 17% by 2020. It will also limit the tax deductions that large groups can claim for UK interest expenses, as from April 2017.
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Anti-avoidance and evasion provisions were enhanced, including a new legal requirement to correct a past failure to pay UK tax on offshore interests within a defined period of time. There will also be consultation on a new requirement for intermediaries who arrange complex structures for clients holding money offshore, to be required to notify HM Revenue & Customs of those structures and to provide lists of clients.
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With the main exceptions of pension contributions and advice, childcare vouchers, cycle to work and ultra-low emission car schemes; the Government intends to remove salary sacrifice schemes on a range of employee benefits. The tax and NIC advantages of most salary sacrifice schemes will be removed from 6th April 2017 as previously proposed, but there will be some transitional protections.
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Insurance premium tax will be increased from 10% up to 12% on 1 June 2017, the third increase in the past 18 months.
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Following the announcement in the 2015 Summer Budget, the Chancellor announced tax changes for non-domiciled individuals, which will take effect as planned from April 2017. Where individuals become deemed to be UK domiciled as from this date, their non UK assets will be re-based to their market value on the 6th April 2017. More specific details of how this will be applied, or indeed elections to be made, are to follow.
Please note that the above report is only our brief interpretation and understanding of the Government's budget proposals for the 2016 Autumn Statement, delivered to Parliament by Philip Hammond on Wednesday 23rd November 2016. These provisions are normally confirmed upon the receipt of Royal Assent later in the year. Jonathan Davis. and his associates cannot be held responsible for any errors, omissions or changes to the above.
News Item - March 2016
A brief summary of the Chancellor's Autumn Statement on Wednesday 16th March 2016:
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Corporation Tax - from April 2020, the main rate will be cut to 17%, in addition to previously announced main rate cuts over the next 3 financial years
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Capital Gains Tax- from 6th April 2016, the higher rate will be reduced from 28% to 20%, and the basic rate from 18% to 10%. However, residential property will still be taxed at current 28% and 18% rates on carried interest and residential properties, such as buy-2-let, etc.
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Salary Sacrifice - these arrangements still high on the hit list of HMRC
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V.A.T. - no changes in rates but registration threshold goes up to £ 83,000 from April 2016.
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National Insurance - from April 2018 employers will have to pay contributions on pay outs, (e.g. termination payments) above £30,000 where Income Tax is also due. Payments up to £30,000 for those who lose their job will remain free of both Income Tax and N.I.
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Capital Allowances - businesses investing in new plant & machinery in Enterprise Zones can qualify for 100% CA for up to 8 years.
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Insurance Premium Tax- standard rate will be increased from 9.5% to 10% from 1st October 2016
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National Minimum Wage rates - will be increased (per hour) from October 2016: £4.00 (16-17); £5.55 (18-20); £6.95 (21-24)
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Business Rates: from April 2017, small firms that occupy premises with a rateable value of £12,000 or less will no longer pay. There will be a tapered rate of relief on properties worth up to £15,000. From April 2020, rates will be linked to CPI and no longer the RPI, meaning bills almost certainly be cut.
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Stamp Duty- from 17th April 2016, rates will apply to the value of the property over each tax band (not whole transaction). The new rates and bands: 0% up to £150,000; 2% between £150,001 to £250,000; 5% above £250,000. Rates for leasehold rent transactions will also change, with a new 2% rate on leases with a NPV over £5m.
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Road Fuel Duty - main rate for petrol and diesel frozen at 57.95 pence per litre in 2016-2017, as will HGV VED and Road User Levy rates
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Entrepreneurs’ relief - extended to include investors relief; available to investors (though not employees) who subscribe for new shares in an unlisted trading company from 17th March 2016. However, the shares must be held continually for a minimum 3 years before disposal
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Class 2 NIC - abolished from 6th April 2018 (Self-employed)
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Loans to participators (Close Companies) - from April 2016 the rate of tax increased from 25% to 32.5% to new loans
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Disguised remuneration - immediate changes to restrict the effect of rules that allow employees to escape tax changes by paying for assets held in trusts (targeted anti-avoidance rule)
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Lifetime ISA - from April 2017 introduced for adults under 40. Savers can pay in up to £4,000 pa and receive a 25% bonus from the Government up to their 50th birthday. The funds can be withdrawn from age 60, or, at any time after the first 12 months if the funds are used to purchase a first home up to £450,000
Please note that the above report is only our brief interpretation and understanding of the Government's budget proposals for the 2016 Spring Statement, delivered to Parliament by George Osborne on Wednesday 16th March 2016. These provisions are normally confirmed upon the receipt of Royal Assent later in the year. Jonathan Davis and his associates can not be held responsible for any errors, omissions or changes to the above.