Restrictions on the deductibility of corporate interest expense – an announcement of the final shape of the new regime (or that it will be deferred for a year or two) will be made following consultation during the summer.
Reform of corporate loss relief rules – an announcement on the final shape of the proposed new regime for corporate tax losses will be made following consultation during the summer.
Tax relief for temporary and touring exhibitions at museums and art galleries – a new tax relief will be introduced following consultation during the summer.
Initial proposals for reform of the substantial shareholdings exemption – following consultation during the summer, draft legislation is likely to be published for further consultation.
Secondary transfer pricing tax adjustments – a system for secondary adjustments to apply to the UK’s transfer pricing regime is likely to be introduced following consultation during the summer.
Alignment of dates by which an employee has to ‘make good’ the cost of their benefit-in-kind to reduce their tax liability – draft legislation is expected for this measure that was consulted on during the summer.
Salary sacrifice for the provision of benefits in kind – draft legislation is expected for this measure that was consulted on during the summer, but it is possible minor changes to the proposals will be announced.
Company car tax changes – changes to the CO2 emissions bands for ultra-low emission vehicles (below 75 grams of CO2 per kilometre) are expected to be included in the draft Finance Bill.
Changes to the rules for off-payroll working in the public sector - changes requiring tax to be deducted by the public sector body or an intermediary entity in such arrangements are expected to be included in the draft Finance Bill.
Tightened rules on the taxation of termination payments – including legislation to clarify that all payments in lieu of notice and certain damages payments are taxable as earnings and removing ‘foreign service’ relief are expected to be included in the draft Finance Bill.
Simplification of the process for applying for and agreeing PAYE settlement arrangements (PSAs) – following consultation over the summer, measures to simplify the administration of PSAs are expected to be included in the draft Finance Bill.
Reforms to the taxation of non-domiciles – following consultation, reforms to the taxation of non-domiciles are expected to be confirmed. It is possible an announcement may be made to delay the existing proposals for 12 months, but this appears unlikely. There is a very short timescale for implementation of any necessary tax planning by 6 April 2017 and given feedback to the recent consultation, it is also possible that there will be further consultation on amended measures – this could be a way for the Government to ‘save face’ but still delay the introduction of the new rules until say 6 April 2018, but is unlikely.
Pensions advice allowance – an allowance for people to withdraw £500 tax free, before the age of 55, from their defined contribution pension to redeem against the cost of financial advice is expected to be included in the draft Finance Bill.
Removal of the requirement to deduct income tax at source - the requirement to deduct tax from interest distributions from various entity types including open-ended investment companies, authorised unit trusts and investment trust companies, and from interest on peer to peer loans is expected to be included in the draft Finance Bill.
Changes to the taxation of partnerships – following recent consultation, it is expected that an announcement will be made, but this is likely to be of further consultation.
Introduction of new allowances - a £1000 allowance for property income and a £1000 allowance for trading income are expected to be included in the draft Finance Bill.
Changes to the current tax rules for part surrenders and part assignments of life insurance policies – changes to prevent excessive tax charges arising on these products are expected to be included in the draft Finance Bill.
Changes to the property categories for personal portfolio bonds - changes to the taxation of life insurance policies (personal portfolio bonds) are expected to be included in the draft Finance Bill.
Measures to streamline the tax rules for investors in authorised contractual schemes – such measures are likely to be included in the draft Finance Bill, or else for consultation.
Simplifying tax for unincorporated businesses and introduction of the cash basis for unincorporated property businesses - following consultation during the summer and autumn, an announcement is likely on these proposals that will support the Government’s making tax digital agenda.
Alignment of income tax and national insurance contributions – following the Office of Tax Simplification’s first report, a further report is likely to be published alongside a possible formal consultation.
Removal of the legislative requirement that stakeholder child trust funds must be subject to lifestyling – legislation expected to be included in the draft Finance Bill.
Making tax digital – following significant consultation during the summer and autumn, an announcement is likely on these proposals, although this may be that full implementation of the proposals will be delayed to ensure smooth and effective implementation.
Measures to tackle ‘disguised remuneration’ - measure to tackle ‘disguised remuneration’, typically by using employment benefit trusts, are expected to be included in the draft Finance Bill.
Extension of VAT grouping eligibility provisions – following recent EU court decisions, eligibility to be included in VAT groups may be extended to include, for example, partnerships.
Policy changes to VAT recovery by holding companies that are members of VAT groups – Following recent EU and UK court decisions, policy changes are expected relating to VAT recovery by holding companies.
Amendment to place of supply for services relating to immovable property – Under EU rules, the place of supply of services relating to immovable property will, from 1 January 2017, be where the property is situated. The Government will therefore need to adapt existing UK legislation where appropriate.
Strengthening the VAT disclosure of tax avoidance schemes rules – following the issue of the consultation (Strengthening the Tax Avoidance Disclosure Regimes for Indirect Taxes and Inheritance Tax), the VAT disclosure regime (VADR) is likely to be completely redrafted to more closely align the VADR with the direct tax disclosure of tax avoidance schemes (DOTAS) rules for direct taxes.
Primary changes are likely to include:
- a re-design of the regime to operate on a promoter basis, whereby the requirement to disclose ‘schemes’ and provide further and ongoing information would fall on ‘promoters’ rather than as currently, users of ‘listed’ or ‘hallmarked’ schemes;
- the removal of ‘listed’ schemes;
- the replacement of the current VADR ‘purpose’ test with the DOTAS ‘benefit’ test;
- the removal of the turnover threshold currently applicable to ‘listed’ and ‘hallmarked’ schemes;
- the inclusion of non-taxable (non-business / exempt) persons in VADR;
- the removal of existing VADR penalties and imposition of penalties in line with those applicable in DOTAS;
- updates and refinements to the existing VADR ‘hallmarks’; and
- the inclusion of gambling duties, insurance premium tax (IPT), landfill tax, climate change levy (CCL), aggregates levy and all excise duties and customs duties within VADR.
New penalties for participating in VAT fraud - a new penalty regime for participating in VAT fraud will be introduced. The new penalty regime will enable HMRC to issue a penalty at the same time that its principle decision has been made (rather than awaiting the findings of a tribunal) and will not distinguish between whether a business or individual knew, or should have known, of the connection with VAT fraud.