The Local Government Association (LGA) has launched a nationwide consultation to kick-start a “desperately-needed” debate on how to pay for adult social care and rescue the services caring for older and disabled people from collapse.
The LGA eight-week consultation therefore sets out options for how the system could be improved and the radical measures that need to be considered given the scale of this funding crisis. Possible solutions to paying for adult social care in the long-term outlined in the consultation include: • Increasing income tax for taxpayers of all ages – a 1p rise on the basic rate could raise £4.4 billion in 2024/25 • Increasing national insurance – a 1p rise could raise £10.4 billion in 2024/25 • A Social Care Premium - charging the over-40s and working pensioners an earmarked contribution (such as an addition to National Insurance or another mechanism). If it was assumed everyone over 40 was able to pay the same amount (not the case under National Insurance), raising £1 billion would mean a cost of £33.40 for each person aged 40+ in 2024/25. • Means testing universal benefits, such as winter fuel allowance and free TV licences, could raise £1.9 billion in 2024/25 • Allowing councils to increase council tax – a 1 per cent rise would generate £285 million in 2024/25 The consultation - the biggest launched by the LGA – is seeking the views of people and organisations from across society on how best to pay for care and support for adults of all ages and their unpaid carers, and aims to make the public a central part of the debate. The consultation will run for eight weeks from 31 July. The LGA will respond to the findings in a further publication in the autumn, which will be used to influence the Government’s own expected green paper, forthcoming Autumn Budget for 2019/20 and Spending Review.
Recent surveys by the LGA show that 96 per cent of councils and lead members believe there is a major funding problem with adult social care; 89 per cent said taxation must be part of the long-term solution to funding it, and that 87 per cent of the public support more funding to plug the significant funding gap in the sector.
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OTS review the Business Life Cycle 3 August 2018
The Office of Tax Simplification (OTS) recently published a document that sets out the scope of a new review of the Business Life Cycle.
The first Business Life Cycle (report published in April 2018) review by the OTS addressed the tax charges and reliefs applicable at key stages or events over the course of the life of a business with a primary focus on external events, for example, the raising of capital or a change in ownership rather than on internal events. This second review seeks to consider the extent to which administrative complexity may contribute to errors or a failure to take reasonable care, as well as any other underlying factors which result in compliance related practical difficulties and penalties and which contribute to the tax gap. This review will build on the Office’s previous work and will seek to focus on smaller businesses, particularly those with £2m turnover or less or fewer than 10 employees.
This comprehensive piece of work will consider:
• the accessibility and clarity of guidance and support in relation to the process of setting up a business, including the information on gov.uk (linking to the OTS’s wider work on guidance) • issues arising from the interaction between an individual’s personal and business affairs • how a business works out and administers its taxes (taking into account matters such as Making Tax Digital, record-keeping, filing returns, understanding allowable deductions) • sources of error and unnecessary complexity, and ways these could be eased or mitigated • the way the tax system handles unprofitable years or shorter-term cash flow issues (for example through the loss rules and time to pay arrangements) and the extent to which the tax system helps businesses manage the cash flow demands of paying tax more generally
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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