This will enable people who purchased an annuity before the introduction of the new flexibilities the opportunity to adjust their retirement provision to convert an income - in whole or in part - to a capital lump sum. This will not affect their entitlement to normal state pension.
A full consultation document is to be published on this.
CIPP comment The CIPP welcomes yet another tax break for pensioners. With all the new freedoms many say this will actually increase the tax revenues for the government as people decide to perhaps cash in on these changes. Paying their normal rate of tax rather than the current 55% from 2016 some say will just encourage more people to sell; time will tell. The Chancellor believes people should have a say in what happens to their savings.
Goodbye to end of year tax returns
The government will transform the tax system over the next Parliament by introducing digital tax accounts to remove the need for individuals and small businesses to complete annual tax returns. Further details on the policy and administrative changes needed to deliver this will be published later in 2015.
Millions of individuals will have the information HMRC needs automatically uploaded into new digital tax accounts and for most, the information needed will be automatically received.
The government will consult over the summer on a new payment process to enable tax and National Insurance contributions (NICs) to be collected through digital accounts instead of self-assessment.
CIPP comment It was only a matter of time before HMRC looked to extend real time information reporting from just PAYE to other areas. However in this digital age one must embrace “e”. Whilst the CIPP is pleased with the 2020 implementation date, it will be keeping a close eye on the implementation process for the first 20 million individuals who are due to start in early 2016! It will be important for the government to protect the services provided by HMRC when considering where the £13billion public sector spending cuts are allocated, for these initiatives to succeed. The CIPP hopes to be part of future consultation work making sure this new process benefits from the lessons learned from RTI.
Gift Aid Small Donations Scheme (GASDS)
The amount of small donations charities can get an extra 25% top up payment on in gift aid without needing any paperwork is increasing from £5,000 to £8,000 a year.
Secondary legislation will be introduced to increase the maximum annual donation amount which can be claimed through GASDS to £8,000 allowing charities and Community Amateur Sports Clubs to claim Gift Aid style top-up payments of up to £2,000 a year with effect from April 2016.
The government expects 6,500 charities to claim in full the higher new cash boost of £2,000 a year – nearly double the current amount.
CIPP comment For those members who work for charities the increase from £5k to £8k per annum on automatic gift aid claims we hope will certainly help reduce the admin burdens and is a welcomed announcement.
Personal Savings Allowance
A new Personal Savings Allowance will take 95% of taxpayers out of savings tax altogether. From April 2016, a tax-free allowance of £1,000 (or £500 for higher rate taxpayers) will be introduced for the interest that people earn on savings. If they are a basic rate taxpayer and have a total income up to £42,700 a year, they will be eligible for the £1,000 tax-free savings allowance. If they are a higher rate taxpayer and earn from £42,701 to £150,000, they’ll be eligible for a £500 tax-free savings allowance.
Access the Treasury Personal Savings Allowance one page explainer factsheet .
CIPP comment The CIPP is pleased with this announcement and whilst not directly linked to payroll, for all those wishing to join the CIPP campaign of saving through payroll using credit unions; it removes many individuals from a potential burden of reporting interest via self-assessment.
Fuel Duty
CIPP Policy News Journal
25/04/2016, Page 164 of 453
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