Tax rates and thresholds
The tax-free personal allowance will increase in April 2018 to £11,850 and the higher rate threshold, when higher earners start to pay 40% tax, will increase to £46,350. Both figures are increasing in line with inflation and continue their progression towards the government’s targets for April 2020 of £12,500 and £50,000, respectively.
The Scottish Government is expected to announce the higher rate threshold that will apply to Scottish taxpayers from April 2018, as well as Scottish tax rates, in its draft Budget on 14 December.
Rules for the Marriage Allowance (also known as the Transferrable Tax Allowance) will be revised to allow claims to be made following the death of a partner, backdated by up to four years.
Expenses and Benefits in Kind
Electric vehicles
From April 2018, there will be no Benefit in Kind (BiKs) charge on electricity that employers provide to charge employees’ electric vehicles.
Taxation of employee business expenses
Following the call for evidence published in March 2017, the government will make several changes to the taxation of employee expenses: Self-funded training – the government will consult in 2018 on extending the scope of tax relief currently available to employees and the self-employed for work-related training costs. Subsistence benchmark scale rates – to reduce the burden on employers, from April 2019 they will no longer be required to check receipts when reimbursing employees for subsistence using benchmark scale rates. The existing concessionary accommodation and subsistence overseas scale rates will be placed on a statutory basis, to provide greater certainty for businesses. Guidance and claims process for employee expenses – HMRC will work with external stakeholders to improve the guidance on employee expenses, particularly on travel and subsistence and the process for claiming tax relief on non-reimbursed employment expenses.
Transport tax
Company cars, vans and fuel
The cash equivalent where a van is made available to an employee for private use will increase to £3,350 for 2018 to 2019. The value of the multiplier for calculating the cash equivalent of the fuel benefit for a car will increase to £23,400 for 2018 to 2019. The flat rate charge for the van fuel benefit will be increased to £633 for 2018 to 2019. Legislation will be introduced by statutory instrument to increase the cash equivalent of the van benefit charge and the fuel benefit charges.
The van benefit charge for zero-emission goods vehicles increases from 20% to 40% of the standard charge from April 2018, as previously announced.
The Chancellor announced that the Company Car Tax (CCT) diesel supplement will increase from 3% to 4% from April 2018. The supplement is used when calculating the taxable benefit of a diesel car that is available for private use and will apply to diesel cars registered on or after 1 January 1998 that are not certified to the Real Driving Emissions 2 (RDE2) standard. The supplement will not apply to diesel hybrids or to vehicles other than cars. emissions figures based on the current NEDC test system for CCT and for Vehicle Excise Duty purposes until April 2020. From April 2020, HMRC and the DVLA will switch to figures based on the new test system, WLTP that was introduced in September 2017. The government also confirmed that HMRC and the DVLA will continue using CO 2
Electricity provided by employers to charge employees’ electric vehicles will not be treated as a benefit in kind from April 2018.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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