Draft legislation published for next Finance Bill
Taxation and other measures to be included in the Finance Bill for 2021-22 have now been announced.
The draft legislation largely covers pre-announced policy changes, along with accompanying explanatory notes, tax information and impact notes, as well as responses to consultations and other supporting documents.
The Government has also revealed three new policies that it will legislate for in the autumn:
- The exemption from income tax on payments for the COVID Winter Grant/Local Grant.
- Ensuring that the new Child Winter Heating Assistance and the Short Term Assistance social security payments made by the Scottish Government will not be subject to income tax.
- Ensuring that payments made by the London Capital & Finance Compensation Scheme will not be subject to Capital Gains Tax.
The main areas of the bill
Income Tax draft legislation: The proposal changes the basis period rules for unincorporated businesses from a ‘current year basis’ to a ‘tax year basis’. The transition would take place from 2022 to 2023. The changes would come into effect from 2023 to 2024.
A business’s profit or loss for a tax year would be the profit or loss that occurs in the actual tax year itself, regardless of its accounting date.
Increasing the normal minimum pension age for Pensions Tax: This introduces an age increase from 55 to 57 in 2028meaning pension savers will have to wait an additional two years to access their pensions without incurring an unauthorised payments tax charge unless they are retiring due to ill-health.
Pension Scheme Pays reporting – information and notice deadlines: This measure extends the information and notice deadlines for individuals to ask their pension scheme to settle their annual allowance charge of £2,000 or more, from a previous tax year. This will reduce their future pension benefits in a process known as ‘Scheme Pays’.
Taxation of asset holding companies in alternative fund structures
A qualifying asset holding company must:
- Be at least 70 per cent owned by diversely owned funds – these must be managed by regulated managers or certain institutional investors
- Exist to help move capital, income and gains between investors and underlying investments.
Real Estate Investment Trusts: The measure amends the tax rules that apply to Real Estate Investment Trusts. It also makes changes to conditions that a company must meet to be a UK Real Estate Investment Trust.
Corporation Tax: amendments to the hybrid and other mismatches rules: This sets out how to counter mismatches for payments to hybrid entities. These changes make sure the outcome is proportionate when relevant entities are seen as transparent in their home jurisdiction.
Capital allowances – amendment to statement for structures and buildings allowance: This amendment requires you to record additional information on your allowance statement. The amendment will make it easier for businesses to assess if they are entitled to structures and buildings allowance.
Insurance Premium Tax – identifying where the risk is situated: This moves the criteria for determining a location of risk for Insurance Premium Tax to primary legislation, to provide clarity for the insurance industry.
New proposals to clamp down on promoters of tax avoidance: The introduction of these new proposals will:
- Make sure promoters face tougher action to discourage them from operating
- Disrupt their activities
- Do more to support customers to steer clear of and leave tax avoidance arrangements.
Powers to tackle electronic sales suppression: New powers will reduce opportunities and decrease the existing use of electronic sales suppression, which is where businesses or individuals use technology to artificially reduce their reported sales and corresponding tax liabilities.
Large businesses – notification of uncertain tax treatment: Large businesses will need to tell HMRC if they adopt an uncertain tax treatment defined by HMRC notification criteria and subject to a monetary threshold set out in legislation.
Tracing and security for tobacco products: HMRC regulation-making powers will introduce tougher more visible street level sanctions to tackle tobacco duty evasion.
Link: Finance Bill 2021-22
- How hard-pressed SMEs can obtain business support
- Be prepared for changes to VAT penalties and VAT interest charges
- Penalties for misuse of Coronavirus Job Retention Scheme
- Managing costs to offset spiralling inflation – Our top tips for cutting your bills
- Take action – Loans to small businesses drop to record low
- ‘New deal’ for tenants to be delivered in Renters Reform Bill
- National Insurance thresholds are changing – Are you ready?
- Make sure you are making the correct PAYE payments to HMRC
- Could Government-backed business loans become permanent?
- Working from home tax relief continues, but fewer employees likely to be eligible this year
- Our top tips for hiring your first employee
- Revenue updates guidance on tipping apps
- Expansion of the Trust Registration Service – What you need to know
- Don’t ignore the warning signs that you or a customer’s business is in trouble
- Keeping a lid on business expenses
- How can you finance a new business?
- Getting to grips with the new National Insurance and Dividend Tax Rates
- Looking to start a new business? You aren’t alone
- R&D Tax Credits – What is changing next year
- HMRC to launch new mandatory P87 expenses form
- Spring Statement 2022
- Are you making the most of super-deduction tax relief?
- Retain key staff with salary sacrifice schemes
- Cash flow statements – How to avoid errors that damage your business
- How to make the most of cloud-based accounting software
- Avoid the pitfalls of the SEISS scheme
- Company tax returns must include COVID-19 grants says HMRC
- HMRC focuses on backlog of work by shuttering telephone services
- Top tax tips to help your business save money
- Nearly half a million SMEs at risk of failing due to late payments crisis
- Fears over move to MTD, as few take part in income tax pilot scheme
- Company directors banned for Bounce Back Loan fraud
- New tax rules on holiday lets – What does it mean for owners?
- Most popular options available when setting up a new business
- Can you avoid the P11D process?
- Give yourself Time to Pay
- Cash no longer king as card payments surge in lockdown
- Be prepared for changes to Corporation Tax in 2023
- Accountants critical to the success of SMEs
- How the penalty system for late tax submissions is changing
- Income tax basis periods – What unincorporated businesses need to know
- New COVID financial support announced
- Prepare now for the final stage of MTD for VAT
- Eight New Year’s resolutions that businesses should follow
- Homes price boom sparks a big rise in Inheritance Tax receipts – What can you do to save tax?
- PAYE Settlement Agreement can save time and costs
- Self-Assessment taxpayers warned over fraudsters trying to steal information
- Should payments made by an employee for vehicle and uniform rental be treated as reductions when calculating the National Minimum Wage (NMW)?
- Plan B – What does it mean for you and your business?
- Take advantage of the extension to the Recovery Loan Scheme
- Simple steps you can take to cut business costs and maximise profits
- Is your business struggling with debt? Regain control today
- Top tips for filing your Self-Assessment tax return
- How businesses can avoid becoming the victims of fraud
- Need Help to Grow? Learn about the latest Government-backed support for SMEs
- Business rates reform – How will it affect you
- What Is the Best Cloud Accounting Software for UK Restaurants?
- Autumn Budget 2021
- Worried COVID Plan B may affect you or your business?
- I have been sent a nudge letter by HMRC – What should I do next?
- Received a CJRS compliance check? Act now!
- MTD for Income Tax delayed – What it means for you
- Buying a business – Top tips to secure the best deal
- Six steps to secure finance for your business
- Managing business costs – what the energy and supply crisis may mean for your company
- Kickstart Scheme and apprenticeship incentives extended
- Final SEISS deadline – Submit your claim by 30th September!
- SME confidence is on the rise as employers make plans to expand their workforce
- Minimum wage non-payment excuses ‘outrageous’
- Couples could be missing out on tax breaks
- New weapons in the war on cybercrime
- Beware of rising house prices increasing Inheritance Tax liability
- Frustrated SMEs turning to unsecured loans to grow businesses
- How will the National Insurance and dividend tax increases affect me?
- Beware of exceeding your pension pot allowance
- Draft legislation published for next Finance Bill
- Super-deduction gives businesses confidence to grow
- Taxman says help available as debt collection resumes
- SMEs optimistic and frustrated as economy set to thrive
- HMRC auto-correcting 2020-21 SEISS tax returns
- The fifth round of the Self-Employment Income Support Scheme (SEISS) is now open
- Government updates self-isolation rules with limited exemptions for 16 sectors
- Freedom Day – What does it mean for businesses?
- Time to prepare for Corporation Tax changes
- Making Tax Digital for Income Tax – Get ready now!
- Points-based system for HMRC late payment penalties
- Take account of your year-end tax liabilities
- Director’s ban a warning to others to keep proper company records
- Don’t miss the deadline for renewing tax credits
- A helping hand with the cost of children’s summer activities
- CJRS – Upcoming changes to payments and the furlough scheme
- Preparing for the end of the Stamp Duty Holiday
- Government extends ban on commercial evictions until March 2022
- Fifth round of the Self-Employment Income Support Scheme to launch in late July
- Businesses can still access the Recovery Loan Scheme
- Make sure to include SEISS grants on your next tax returns
- Beware of the HMRC scammers, but ignoring calls can be costly
- Carry back scheme brings welcome relief for business
- New recommendations in sweeping CGT review
- Tax saving strategies for landlords