The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
National Insurance rates remain unchanged. Unlike in recent years, there are no structural changes to the NIC regime for 2017-18.
As recommended by the Office of Tax Simplification (OTS), the National Insurance secondary (employer) threshold and the National Insurance primary (employee) threshold will be aligned from April 2017, meaning that both employees and employers will start paying National Insurance on weekly earnings above £157.
Class 2 National Insurance Contributions
As previously announced at Budget 2016, Class 2 NICs will be abolished from April 2018 and entitlement to contributory benefits for the self-employed will be accessed through Class 3 and Class 4 NICs.
Removing National Insurance from the effects of the Limitation Act
From April 2018, the government will remove NICs from the effects of the Limitation Act 1980 and Northern Ireland equivalent. This will align the time limits and recovery process for enforcing National Insurance debts with other taxes. The government will consult on the details.
Cars and vans
Car and van fuel charges and the van benefit charge increase by RPI each year; the amounts for 2017-18 were announced in associated documents published alongside the Autumn Statement. The car fuel benefit charge multiplier will increase by £400 to £22,600 and the van fuel benefit charge will increase by £12 to £610. The van benefit charge will increase by £60 to £3,230. To encourage the purchase of ultra-low emission vehicles (ULEVs), the government confirmed the introduction of new, lower bands for company car tax in tax year 2020-21. The appropriate percentage list price subject to tax will increase by 1% for cars with CO 2 emissions greater than 90 grams per kilometre in 2020-21, with a 3% differential between the lower emissions bands. The maximum company car tax (CCT) will remain at 37% into the 2019-20 tax year and the 3% diesel supplement remains in place until April 2021.
Expenses and benefits
Salary sacrifice
Following consultation, the tax and employer National Insurance advantages of salary sacrifice schemes will be removed from April 2017, except for arrangements relating to pensions (including advice), childcare, Cycle to Work and ultra-low emission cars. This will mean that employees swapping salary for benefits will pay the same tax as the vast majority of individuals who buy them out of their post-tax income.
Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.
CIPP comment
No major surprises to be had here and under the circumstances this outcome is as good as we could have hoped for however it would be reassuring to see a little more detail in a formal consultation response, particularly for employers currently undertaking their annual review of pay & reward arrangements that may impact on affected BIKs.
Benefits in kind
The government will consider how benefits in kind are valued for tax purposes, publishing a consultation on employer- provided living accommodation and a call for evidence on the valuation of all other benefits in kind at Budget 2017.
Employee business expenses
The government will publish a call for evidence at Budget 2017 on the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer.
Fuel duty
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 229 of 588
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