The government has issued draft Finance Bill 2018-19, including draft legislation for at least 33 significant measures affecting employment tax, simplification of Gift Aid, company car tax liability, Making Tax Digital penalty regime and new rules for tax under IFRS 16 Leases, reports Sara White
The draft legislation is out for consultation until the end of August and will be approved at the Autumn Budget, likely to take place in November at the latest.
The measures include changes to income tax rent-a-room relief, simplification of donor benefits rules for Gift Aid and changes to Optional Remuneration Arrangements rules for taxable cars and vans affecting company car owners.
For property owners, there are changes to the stamp duty land tax (SDLT) filing and payment time limits, while the government will go ahead with the extension of offshore time limits for the assessment of tax.
There is also a decision on the government’s approach to the penalty system for Making Tax Digital despite complaints in the consultation responses that the system was overly complicated.
The government has confirmed that penalties will be calculated on debts remaining due after 15 days from the payment due date although on a mitigated basis where payment is made or a Time to Pay arrangements (TTP) has been set up until 30 days after the due date.
For businesses, the rules for corporation tax compliance with the new International Financial Reporting Standard (IFRS 16 Leases) are out for draft consultation, as are changes to the corporate interest restriction rules and reform of loss relief rules.
On the Climate Change Levy, there will be a new exemption for mineralogical and metallurgical processes, likewise on oil and gas taxation, rules on transferable tax history and retention of decommissioning expenditure will come into effect.
Further to the government’s attempts to curb abuse of the UK investment property market, there will be a further clampdown on UK property income of non-UK resident companies using the corporation tax framework.
On personal tax, a new rent-a-room relief test will require the individual or individuals in receipt of rental income, to have shared occupancy of the residence in question for all, or part of the period, of occupation which gives rise to the receipts. This is in part to tackle abuse of the system through growth of the gig economy.
For charities, a new Gift Aid measure is meant to simplify the donor benefits rules that apply to charities who claim Gift Aid tax relief on donations. It will replace the current mix of monetary and percentage thresholds that charities have to consider when determining the value of benefit they can give to their donors without losing the entitlement to claim Gift Aid tax relief on the donations given to them. This follows various consultations on the measure, which proved controversial.
From April 2019 the benefit threshold for the first £100 of the donation will remain at 25% of that amount. Charities can offer an additional benefit of 5% to donors on the amount of the donation that exceeds £100. The total value of the benefit that a donor can receive remains at £2,500.
There are two changes affecting employees provided with taxable cars and vans to address anomalies in the Optional Remuneration Arrangements (OpRA) rules, by introducing legislation to ensure that when a taxable car or van is provided through OpRA, the amount foregone, which is taken into account in working out the amount reportable for tax and national insurance contributions (NIC) purposes, includes costs connected with the car or van (such as insurance) which are regarded as part of the benefit in kind under normal rules.
There will also be an adjustment to the value of any capital contribution towards a taxable car when the car is made available for only part of the tax year.
Another car related measure will see new rules to exempt employees’ workplace charging of all-electric and plug-in hybrid vehicles from income tax and NICs.
The following measures will be introduced in Finance Bill 2018/19:
Making Tax Digital
Making Tax Digital: interest harmonisation and sanctions for late payment
Employer contributions
Abolition of receipt checking for benchmark scale rates and changes to overseas scale rates
Simplification of donor benefits rules for Gift Aid
Changes to Optional Remuneration Arrangements rules for taxable cars and vans
Workplace charging for all-electric and plug-in hybrid vehicles
Changes to the taxation of emergency vehicles
Reform of employer contributions into life assurance and overseas pension schemes
Business tax draft legislation
Income Tax and Corporation Tax response to accounting changes for leasing
Corporation Tax changes to the corporate interest restriction rules
Climate Change Levy exemption for mineralogical and metallurgical processes
Changes to the Corporation Tax reform of loss relief rules
Corporation Tax on UK property income of non-UK resident companies
Oil and gas taxation: transferable tax history and retention of decommissioning expenditure
Indirect tax draft legislation
HGV levy tax information and impact note
VAT grouping eligibility criteria changes
Exempt zero-emission capable taxis from Vehicle Excise Duty expensive car supplement
Changes to Gaming duty accounting periods and administration
Stamp duty draft legislation
Stamp Duty exemption for financial institutions in resolution
Changes to the Stamp Duty Land Tax filing and payment time limits
Tax administration and anti-avoidance draft legislation
Extension of offshore time limits for the assessment of tax
Extension of security deposit legislation
Interest harmonisation and sanctions for late payment
Technical note on Capital Gains Tax and Corporation Tax for non-residents on UK property
EU directives draft legislation
Implementing a directive on tax dispute resolution mechanisms in the EU
Anti-Avoidance Directive about controlled foreign companies and EU Exit
Changes to the Corporation Tax exit charges
Hybrid and other mismatches Anti-Tax Avoidance Directive
International Tax Enforcement disclosable arrangements
Capital Gains Tax draft legislation
Capital Gains Tax and Corporation Tax on UK property gains
Entrepreneurs’ Relief where shareholding ‘diluted’ below the 5% threshold
Deferral of exit charge payments for Capital Gains Tax
Each measure is accompanied by a tax information and impact note (TIIN) which sets out what the legislation seeks to achieve, why the government is undertaking the change and a summary of the expected impacts, draft legislation, and an explanatory note which provides a more detailed guide to the legislation.
The consultation period for all draft legislation will close on Friday 31 August 2018.
Read detailed coverage of the various measures in the Accountancy Daily Tax section
Report by Sara White