One Month in a Minute: May 2018

Lee Sharpe General Taxation Leave a Comment

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GOING DIGITAL

HMRC announced in a Public Accounts Committee session on 30 April 2018 that its digital transformation programme was being slowed down in some areas, to meet demands for resource as a result of Brexit. While MTD for VAT is still on track for April 2019, other projects are being sidelined:

  • The simple assessment programme involves HMRC issuing tax calculations to certain categories of taxpayers with relatively simple tax affairs, with figures for PAYE and bank interest pre-populated from information that HMRC already holds. This approach avoids the need for formal tax returns. While those already in the simple assessment regime are expected to continue to receive simple assessments, no further candidates will be added for the foreseeable future. It should be noted that a clearly unexpected outcome of the simple assessment regime was that tax yield fell against expectations.
  • Dynamic coding involves HMRC working automatically with real time PAYE Information and assuming that the details will apply for the entire year, resulting in prompt (and often unwarranted and wholly inappropriate) in-year tax code changes. Dynamic coding is being postponed indefinitely.
  • Plans for digitised services for inheritance tax, venture capital schemes and PAYE settlement agreements have also been halted.

PERSONAL TAXATION

Self-assessment forms and helpsheets published

HMRC has released the annual Self Assessment forms and helpsheets, which may be found here.

HMRC has also released income tax repayment claim forms, etc., here.

BUSINESS TAXATION

Employer Bulletin

HMRC has published its latest Employer Bulletin, covering end of year routines and, in particular:

  • PAYE late filing penalties;
  • simplifying PAYE settlement agreements;
  • diesel supplement increase and introduction of the real driving emissions 2 standard (from 6 April 2018, cars that are NOT certified to the RDE2 standard will suffer a 4 per cent benefit supplement – an increase on the traditional 3 per cent we have seen for many years);
  • new rules for termination payments from 6 April 2018 (including the extension of NICs to all payments in lieu of notice, as noted below);
  • pension contributions to increase from 2 per cent to 5 per cent;
  • student loan thresholds are now £18,330 (Plan 1) and £25,000 (Plan 2).

For more information on PAYE Settlement Agreements, click here.

TRUSTS AND INHERITANCE TAX

IHT review – OTS call for evidence and survey

The Office of Tax Simplification (OTS) is seeking views, from those who have concerns about or personal experience of Inheritance Tax, to inform its simplification review – the OTS is interested in the ease or complexity of the legislative rules and the processes that have to be followed.

The OTS says it wants to hear from individuals as well as professional advisers and representative bodies. To that end, the on-line survey is the first that the OTS has issued to the public generally, to help ensure its analysis is as fully informed as possible.

The OTS has included both the processes, and the claims and exemptions in its remit. Practitioners will be acutely aware that the government’s / HMRC’s approach to ‘simplification’ often seems quite different to that of the OTS; or, indeed, anyone else.

The deadline for responses to both the call for evidence and the on-line survey is 8 June 2018.

For more on inheritance tax exemptions and reliefs, click here.

TAX ADMINISTRATION

New engagement letters

The Chartered Institute of Taxation (CIOT) has published new engagement letters for tax work, etc., for its members, alongside several of the other bodies. The letters of engagement, privacy notice, specimen schedules of service, standard terms and conditions of business and letter of disengagement are intended to be adapted and amended by tax practitioners to suit their own practice.

The engagement letters have incorporated changes to reflect the GDPR and Data Protection Act (DPA) 2018.

To read this article in full and for our other online tax services, email pete.taylor@bloomsbury.com for a free trial.


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