Financial support for higher education will be increased substantially to enable people to study for a degree. The Government will lift the age cap on new loans to postgraduates from 2016-17 so they are available to all those under 60. Following a sharp decline in part-time students since 2008, the Government will introduce new part-time maintenance loans from 2018-19 to support the cost of living while studying. The Government expects 150,000 part-time students could benefit each year by the end of the Parliament. For all STEM subjects (science, technology, engineering and mathematics), tuition loans will be extended to students wishing to do a second degree from 2017-18. During the summer the Government consulted on two options for student loan repayment thresholds: to keep the loan repayment threshold at £21,000 for all students from April 2016, or to freeze it at the level it would have reached in 2020 only for new borrowers starting in academic year 2016-7 and repaying from April 2020. The statement today has revealed that the Government has chosen their preferred option and will freeze the student loan repayment threshold for Plan 2 graduates for five years from April 2016. The CIPP ran a survey to inform our response to the consultation and 80.3% of respondents were in favour of this option. Student loan repayment threshold
Welsh devolution of income tax
The Wales Act 2014 gained Royal Assent in December 2014 and amongst a range of other non-fiscal measures, section 13 enables the Welsh Assembly to trigger a referendum on the devolution of some income tax. We had been waiting for news of whether there will be a referendum and the Government has now announced that it will legislate to remove the requirement for the Welsh Assembly to hold a referendum in order to implement the Welsh Rates of Income Tax.
Tax administration and simplification
Making tax digital
The Government has committed to investing £1.3 billion to transform HMRC into one of the most digitally advanced tax administrations in the world which will see most businesses, self-employed people and landlords being required to keep track of their tax affairs digitally and update HMRC, at least quarterly, via their digital tax account. This is hoped to reduce errors currently encountered through record keeping. HMRC will ensure the availability of free apps and software that link securely to HMRC systems and will provide support to those who need help using digital technology. This will not apply to individuals in employment, or pensioners, unless they have secondary incomes of more than £10,000 per year.
The Government will publish its transformation plans of the tax system shortly and will consult on the details in 2016.
HMRC’s customer cost reduction target
HMRC is to introduce strengthened targets to reduce the annual cost to business of tax administration by £400 million by the end of this Spending Review period.
Clarification of time limits for self-assessment
The Government is to publish draft legislation clarifying the time allowed for making a self-assessment. It will make clear that the time limit is four years from the end of the relevant tax year (Finance Bill 2016).
Office of Tax Simplification (OTS) review of employment status
In response to the final report of the OTS review of employment status, the Government plans to take forward the majority of recommendations, further details to follow, and therefore we can assume further consultations will follow also.
Taxation of accommodation benefits
Following on from recommendations made in the 2014 OTS report on simplifying the administration of employee benefits and expenses, the Government will publish a call for evidence on the current tax treatment of employer provided living accommodation.
Simple assessment
The Government plans to publish draft legislation that will enable a new, simpler process for paying tax. This will be used for taxpayers in self-assessment who have simple tax affairs where HMRC already holds all the data it needs to calculate the tax liability, and where existing payment processes are not available. Taxpayers will be
CIPP Policy News Journal
25/04/2016, Page 171 of 453
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