The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
HMRC will develop its ability to identify emerging insolvency risk, using external analytical expertise. HMRC will use this information to tailor its debt collection activity, improve customer service and provide support to struggling businesses.
Requirement to correct
The government will introduce a new legal requirement to correct a past failure to pay UK tax on offshore interests within a defined period of time, with new sanctions for those who fail to do so.
Requirement to register offshore structures
The government will consult on a new legal requirement for intermediaries arranging complex structures for clients holding money offshore to notify HMRC of the structures and the related client lists.
Tackling the hidden economy
The government will legislate to extend HMRC’s data-gathering powers to money service businesses in order to identify those operating in the hidden economy.
Following consultation, the government will consider the case for making access to licences or services for businesses conditional on them being registered for tax. It will also develop proposals to strengthen sanctions for those who repeatedly and deliberately participate in the hidden economy. Budget 2017 will set out further details.
Other areas of interest
Business and corporate tax
The government’s decision at the Autumn Statement to prioritise high value infrastructure and innovation will support businesses across the UK. The government is also taking significant steps to support businesses to grow and create jobs through the regulatory and tax systems. Business tax road map To continue providing the certainty that businesses need to make their long-term investments, the government is recommitting to the business tax road map and the principles that it sets out. This includes cutting the rate of corporation tax to 17% by 2020 and reducing the burden of business rates by £6.7 billion over the next 5 years. Tax deductibility of corporate interest expense Following consultation, the government will introduce rules that limit the tax deductions that large groups can claim for their UK interest expenses from April 2017. These rules will limit deductions where a group has net interest expenses of more than £2 million, net interest expenses exceed 30% of UK taxable earnings and the group’s net interest to earnings ratio in the UK exceeds that of the worldwide group. Employee Shareholder Status (ESS) The tax advantages linked to shares awarded under ESS will be abolished for arrangements entered into, on, or after 1 December 2016. The status itself will be closed to new arrangements at the next legislative opportunity. This is in response to evidence suggesting that the status is primarily being used for tax planning instead of supporting a more flexible workforce. Offshore funds UK taxpayers invested in offshore reporting funds pay tax on their share of a fund’s reportable income, and Capital Gains Tax (CGT) on any gain on disposal of their shares or units. The government will legislate to ensure that performance fees incurred by such funds, and which are calculated by reference to any increase in the fund’s value, are not deductible against reportable income from April 2017 and instead reduce any tax payable on disposal gains. This equalises the tax treatment between onshore and offshore funds.
Indirect tax
Value Added Tax (VAT) The government will consult on VAT grouping and provide funding with a view to digitising fully the Retail Export Scheme to reduce the administrative burden to travellers.
Soft Drinks Industry Levy The government will publish draft legislation for the Soft Drinks Industry Levy on 5 December 2016.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 233 of 588
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