The government welcomes the Financial Conduct Authority’s plans to expand access to the Financial Ombudsman Service (FOS) to small and medium-sized enterprises (SMEs) with a turnover of up to £6.5 million, along with its consultation on increasing the FOS award limit to £350,000.
Universal Credit
Work Allowance increase The amount that households with children, and people with disabilities, can earn before their Universal Credit award begins to be withdrawn, known as the Work Allowance, will be increased by £1,000 from April 2019. Transitioning onto Universal Credit Building on the Autumn Budget 2017 announcement that Housing Benefit claimants will receive an additional payment providing a fortnight’s worth of support during their transition to Universal Credit, the government will extend this provision to cover the income-related elements of Jobseeker’s Allowance and Employment and Support Allowance, and Income Support. This will be effective from July 2020. CIPP comment With Universal Credit dominating most news bulletins over the past few weeks, it is unsurprising that this Budget contained several measures to address the criticisms levelled at the government, only two of which are included in this report. With employer RTI submissions central to the operation of Universal Credit we will watch with interest if further changes arise over the coming months. VAT registration threshold The Chancellor said that he had been exploring ways to address “the cliff edge effect of VAT registration” but that EU law limits the options open. As a consequence the VAT threshold will be maintained at the current level of £85,000 for a further two years until April 2022. The government will look again at the possibility of introducing a smoothing mechanism once the terms of EU exit are clear Digital services tax (DST) From April 2020, the government will introduce a new 2% tax on the revenues of certain digital businesses to ensure that the amount of tax paid in the UK is reflective of the value they derive from their UK users. The tax will: • apply to revenues generated from the provision of the following business activities - search engines, social media platforms and online marketplaces • apply to revenues from those activities that are linked to the participation of UK users, subject to a £25 million per annum allowance • only apply to groups that generate global revenues from in-scope business activities in excess of £500 million per annum The government remains committed to G20 and OECD discussions on potential future reforms to the international corporate tax framework and will only apply the DST until an appropriate long-term solution is in place. The government will consult on the detailed design of the DST and legislate in Finance Bill 2019-20. Stamp Duty Land Tax (SDLT) and first-time buyers relief The government will extend first-time buyers relief in England and Northern Ireland so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property. This change will apply to relevant transactions with an effective date on or after 29 October 2018, and will also be backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers relief will be able to amend their return to claim a refund. Devolution Certain key economic policies are devolved, and the UK government has committed to continuing to work closely with the devolved administrations to deliver the maximum benefit for everyone across the UK Spending decisions taken by the UK government in the Budget result in Barnett consequentials for the devolved administrations to deliver their devolved responsibilities: • the Scottish Government’s budget will increase by over £950 million through to 2020-21 before adjustments for tax devolution
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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