Reform of the intermediaries legislation
Off-payroll working
The government reformed the off-payroll working rules (known as IR35) for engagements in the public sector in April 2017. Early indications are that public sector compliance is increasing as a result, and therefore a possible next step would be to extend the reforms to the private sector, to ensure individuals who effectively work as employees are taxed as employees even if they choose to structure their work through a company. The government will consult on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reforms, including through external research already commissioned by the government and due to be published in 2018.
CIPP comment It was widely predicted that addressing off-payroll working in the public sector was simply paving the way for similar reforms in the private sector. The only surprise in the Chancellor’s speech is that the he did not announce those changes in this Budget.
Pensions
Lifetime allowance
The lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018-19.
Life assurance and overseas pension schemes
From April 2019, tax relief for employer premiums paid into life assurance products or certain overseas pension schemes will be modernised to cover policies when an employee nominates an individual or registered charity to be their beneficiary.
Tax administration, simplification and compliance
Late Submission Penalties and Late Payment Interest
The Chancellor announced a reform of the current system for charging penalties and interest on late submissions and payments. The new system will be based on a points-based approach. Also under consideration is the simplification and harmonisation of the current penalty and interest schemes. Final decisions on both schemes will follow consultation.
CIPP comment It is not clear at this time whether this statement affects all tax regimes but the CIPP awaits with interest the publication of this consultation and will survey members accordingly once it is published.
Making Tax Digital
As previously announced and legislated for in the Finance (No 2) Act 2017, Making Tax Digital will not become mandatory until April 2019, and then only for business with a turnover at or above the VAT threshold. The government is committed to ensuring that the system is robust before rolling it out further; the earliest date for any further rollout is April 2020.
Faster recovery of Self-Assessment debt
HMRC will use new technology to recover additional Self-Assessment debts in closer to real-time by adjusting the tax codes of individuals with Pay As You Earn (PAYE) income. These changes will take effect from 6 April 2019.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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