MEMBERSHIP INSIGHT
On your behalf
Policy team update
Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update on a range of topical issues
Introduction Our government continues to plough on in an array of discontent with a heavy focus on Brexit negotiations. The European Union (Withdrawal) Bill (also known as the ‘Great Repeal Bill’) has been introduced to Parliament, designed to ensure that the UK exits the European Union (EU) with maximum certainty, continuity and control. The devolved nations are up in arms about it, with the first ministers of Scotland and Wales joining forces and threatening constitutional crisis as the Bill “undermines the principles of devolution”. To ensure we are prepared for the process of withdrawal from the EU, the government will also be introducing several Bills over the course of the next two years including a Customs Bill and an Immigration Bill. And at some point between 3 May 2018 and 28 February 2019, a referendum may be held (private Bill) on whether the UK should accept the outcome of the negotiations between the government and the EU regarding exit from the EU. Finance Bill measures back on track The Finance Bill introduced in March 2017 provided for several changes to tax legislation that were withdrawn from the Bill after the calling of the general election. The then-financial secretary to the Treasury confirmed at the point they were withdrawn that there was no policy change and that these provisions would be legislated for at the first opportunity in
the new Parliament. Ministers have confirmed that the second 2017 Finance Bill will be introduced as soon as possible after the summer recess and it will legislate for all policies that were included in the pre- election Finance Bill. All policies originally announced to start from April 2017 will be effective from that date. The government published a list of provisions that will apply from the start of the 2017–18 tax year or other point before the introduction of the forthcoming Finance Bill. Included in the list are: ● taxable benefits: time limit for making good ● pensions advice ● legal expenses etc. ● money purchase annual allowance. This is good news for those employers that had worked on the assumption that legislation would be passed early in the next Parliament and therefore any new guidance applied; a prime example being tax exemptions for employer-provided pensions and legal advice, which we wrote about in On Your Behalf in Issue 32 (July/ August). Role of employers in TFC An item in the June 2017 issue of HM Revenue & Customs’(HMRC) Employer Bulletin (http://bit.ly/2sPzkrQ) about parents in receipt of employer-supported childcare (ESC) who opt to come onto tax- free childcare (TFC) contains the following text which raises a few questions: “When a parent in receipt of employer- supported childcare ) (childcare vouchers)
opts to come onto tax-free childcare, they will need to provide their employer with a childcare account notice (CAN). This is a written document (which can be an email) stating that they wish to leave their employer’s voucher scheme and use tax-free childcare. A parent will have 90 days from opening their tax-free childcare account to give their CAN to their employer. At this point the employer will need to terminate their access to employer-supported childcare. “Employers are able to continue to support their employees with the costs of childcare, if they wish to, by paying into their parents’ childcare accounts. However, any contributions will have to be in accordance with income tax and National Insurance rules.” This prescriptive text about an exit strategy from ESC raises questions which we put to HMRC’s TFC implementation team: Does the 90-day window provide an employee with effectively three months of both ESC and TFC? Does that impact on their ability to return to ESC before April 2018 if TFC doesn’t work for them? The TFC replied that it is intended that the CAN process will be as light touch as possible and will allow employees a 90-day period to exit ESC after claiming TFC. The CAN notice is simply a written document (letter or email) informing the employer that they no longer want to receive ESC. The parent is informed of this process through an output when they sign up to TFC. Once a parent provides a CAN notification to their employer, they will not be able to return to ESC. Voucher
| Professional in Payroll, Pensions and Reward | September 2017 | Issue 33 4
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