The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
Simplification of the tax and National Insurance treatment of termination payments 11 August 2016
It was announced at Budget 2016 that legislation would be included in Finance Bill 2017 to tighten and clarify the rules on which types of payments will be treated as salary and which will be subject to the termination payment rules. A consultation on the draft legislation has now been published.
Geographical extent - This regulatory change will apply to all four nations of the UK.
The changes which are due to come into effect in April 2018 include:
clarifying the scope of the exemption for termination payments to prevent manipulation, by making the tax and National Insurance contributions (NICs) consequences of all post-employment payments consistent aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax) removing foreign service relief clarifying that the exemption for injury does not apply in cases of injured feelings
The government has analysed the responses to its consultation on termination payments held in summer 2015 and has set out its response and consultation on draft legislation .
The draft legislation is intended to give effect to the changes and the government invites views on whether this objective is achieved. The closing date for responses is 5 October 2016.
CIPP comment The CIPP will be studying the draft regulations and will, as usual, seek member views where appropriate. Read the CIPP response to the Summer 2015 consultation .
Consultation on non-dom reforms 22 August 2016
The government has published the consultation on the reforms to the way that individuals with a foreign domicile (non-doms) are taxed in the UK. At the Summer Budget 2015 , the government announced a series of reforms to the way that individuals with a foreign domicile (‘non-doms’) are taxed in the UK. These changes will bring an end to permanent non-dom status for tax purposes and mean that non-doms can no longer escape a UK inheritance tax (IHT) charge on UK residential property through use of an offshore structure like a company or a trust. At the Autumn Statement 2015 , the government made a further announcement that it would consult on how to change the Business Investment Relief rules to encourage greater investment into UK businesses.
A consultation was published in September 2015 setting out the detail of the proposals to deem certain non-doms to be UK-domiciled for tax purposes.
This latest consultation document provides an update on those proposals and sets out the detail of proposals to charge IHT on UK residential property. Much, but not all, of the draft legislation for the reforms is attached to the consultation.
If you would like to respond directly to this consultation, the submission deadline is 20 October 2016. Email to: nondomreform@hmtreasury.gsi.gov.uk.
cipp.org.uk
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