Following our earlier blog post on the tax changed announced in the Autumn Statement on 6th December here the following represent the other non-tax headline changes announced on Wednesday.
Small Business Rate Relief
The present Small Business Rate Relief Scheme is to be extended for a further year to April 2014.
Anti-Avoidance and tax evasion
The Government accepted the recommendations of the Aaronson report that a General Anti-Abuse Rule targeted at artificial and abusive tax avoidance schemes would improve the UK’s ability to tackle tax avoidance. The Government has committed to bringing forward legislation in Finance Bill 2013 to enact this measure.
Earlier this week, the Chancellor of the Exchequer and the Chief Secretary to the Treasury announced that the Government is investing a further £77 million in HMRC to increase revenues raised from tackling tax avoidance and evasion. This investment will be used to:
Accelerate resolution of avoidance schemes.
Expand HMRC’s Af?uent Unit to deal more effectively with taxpayers with a net worth of more than £1 million.
Increase specialist resources to tackle offshore evasion and avoidance of inheritance tax.
Improve HMRC’s risking technology, including increased use of third party data.
Additionally, five further measures have been announced in a Written Ministerial Statement. They are effective from 5 December 2012 and cover:
Foreign bank levies – there are no longer allowable deductions for Income Tax or Corporation Tax purposes.
Tax mismatch scheme – which reduces Corporation Tax liability by artificial tax treatment of loans or derivatives.
Property return swaps – which convert capital losses into income losses.
Manufactured payments – schemes involving stock lending arrangements
Payments of patent royalties – relief for non-trade payments to be abolished.
Individual Savings Account (ISAs)
From 6 April 2013 the overall limit is increased to £11,520 (2012-13 £11,280), of which £5,760 can be invested in cash (2012-13 £5,640). The junior ISA is increased to £3,720 (2012-13 £3,600).
Fuel benefit charge
From 6 April 2013 the car fuel benefit multiplier is increased to £21,100 (2012-13 £20,200). This figure is used to tax company car users whose employers pay for their private petrol usage. The charge can be legitimately avoided if the employee reimburses the cost of private fuel used. The equivalent van fuel benefit charge is increased from the same date to £564 (2012-13 £550).
Reducing tax credit error, fraud and debt
A number of initiatives have been announced aimed at reducing the levels of tax credit error and fraud and recovering tax credit debt. They include:
Requiring claimants to provide more evidence to support certain claims for tax credits for children and childcare.
Trialling the use of debt collection agencies to collect tax credit debt.
The announcement of legislative changes to enable the collection of existing tax credit debt from a new tax credit award. Recovering debt New initiatives aimed at recovering debt owed to central government include:
Trials and pilots with the Department of Work & Pensions and Debt Collection Agencies.
An increase to HMRC’s debt management resource for the rest of this year and for 2013-14.
Over the next three years, HMRC will significantly expand the range of digital services to include: • 20 million taxpayers receiving a Personal Tax Statement, showing how their tax is calculated and spent by government, and • A more joined-up digital experience for taxpayers providing an overview of their HMRC ‘account’. This will include: links to all their online transactions, a facility for accessing tailored help and asking HMRC questions.
So all in all a fairly thorough review of the Nations Finances which is broadly tax neutral with any hand outs being balanced with savings elsewhere. No doubt as usual the devil will be in the detail and if there is anything of particular interest that comes to light once draft legislation is issued we will keep you informed. In the mean time for help and advice on any aspects of taxation or personal finances please contact your local Burgis & Bullock office on 0845 177 5500, or using our online contact form