Tax Rates

Tax Rates & Info 2016-17

Tax Rates & Info 2016-17

Welcome to the Visionary Accountants Tax Rates information page. On the following pages you will find all the information you require regards your 2016-17 tax rates…

N.B. Tax rates are the percentage at which an individual or company is taxed. The tax rate is the tax imposed by the government based on an individual’s taxable income or a company’s earnings.

Tax Rates – Subjects covered here include…

Income Tax, Capital Gains Tax, Corporation Tax, Capital Allowances, Value Added Tax, Inheritance Tax, Vehicle Benefits, Mileage Allowances, National Insurance Contributions, Key Dates & Deadlines, Pension Premiums and Withdrawals, Charitable Giving, Tax-Free Savings and Investments, Some Useful Rates, Stamp Taxes, and Land and Buildings Transaction Tax.


Tax Rate & Info – Budget 2016 – Overview

Download our 2016 Budget Overview

Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016

1.1. Income Tax Personal Allowance and Basic Rate Limit from 2017. Increase in the income tax personal allowance to £11,500 in 2017-18. The basic rate limit will also increase to £33,500 in 2017- 18.

This will increase the higher rate threshold, above which individuals pay income tax at 40%, to £45,000 in 2017-18.

1.2. Personal Tax.Personal Savings Allowance. A new tax-free Personal Savings Allowance (PSA) for individuals. This will apply a 0% rate for up to £1,000 of savings income, such as interest, paid to an individual (or £500 for individuals with any higher rate income). The PSA will not be available to individuals with any additional rate income. Alongside the introduction of the PSA, banks, building societies and National Savings and Investments (NS&I) will cease to deduct tax from the account interest they pay to customers. These changes willhave effect in relation to savings income paid or credited on or after 6 April2016. Employment and benefits in kind

1.3. Tackling disguised remuneration. As announced at Budget 2016, the government will bring forward a package of changes to ensure that those who have used disguised remuneration tax avoidance schemes pay their fair share of tax and National Insurance contributions. These schemes often involve individuals being paid in loans through structures such as offshore Employee Benefit Trusts. The changes will tackle disguised remuneration schemes used in the past as well as their continued use. Trading income

1.4. Reform of Wear and Tear Allowance. As announced at Summer Budget 2015, legislation will be introduced in Finance Bill 2016 to repeal the Wear andTear allowance and make new provision for a deduction for expenditure on the replacement of domestic items such as furniture, furnishings, appliances (including white goods) and kitchenware in a let dwelling-house.

The deduction will be for expenditure incurred on or after 1 April 2016 for corporation tax payers and 6 April 2016 for income tax payers on an item that is substantially the same as the item being replaced, plus any costs incurred in disposing of, or less any proceeds received for, the item being replaced. Following technical consultation on the draft clauses, the legislation now accommodates part-exchanges and letting arrangements without a formal lease and clarifies that the item being replaced should no longer be available for use in the dwelling-house.

1.5. Company distributions. As announced at the Spending Review and Autumn Statement 2015, legislation will be introduced in Finance Bill 2016 to amend the Transactions in Securities rules and introduce a Targeted Anti-Avoidance Rule in order to prevent opportunities for income to be converted to capital in order to gain a tax advantage. The government will shortly publish its response to the consultation concerning company distributions, which was published on 9 December 2015.

1.6. Offshore Avoidance- Taxation of immovable property in the UK. As announced at Budget 2016, legislation will be introduced in Finance Bill 2016 to ensure that all profits from dealing in and developing UK land are taxed fully in the UK, whether Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 2 | P a g e or not the business is resident in the UK and regardless of whether there is a UK permanent establishment.

A technical note is published on GOV.UK. The legislation will be introduced at Report Stage, and take effect from the date it is introduced. Anti-avoidance rules have immediate effect to prevent arrangements to circumvent the rules: for example, by advancing profits to periods before the new legislation takes effect, or by arrangements designed to take advantage of tax treaties to avoid tax. Protocols have been agreed with Guernsey, the Isle of Manand Jersey, amending their treaties with the UK to support the introduction of this legislation. These will have effect from 16 March 2016. Corporation Tax

1.7. Corporation Tax rates. As announced at Budget 2016, the corporation tax (CT) main rate will be reduced by an additional 1% for the Financial Year beginning 1 April 2020. Legislation in Finance Bill 2016 will set the rate at17%, replacing the rate set for Financial Year 2020 in the Finance (No. 2) Act 2015.

1.8. Royalty withholding tax. As announced at Budget 2016, legislation will be introduced in Finance Bill 2016 to widen the circumstances in which withholding tax must be deducted from payments of royalties to persons not resident in the UK and to counter the use of contrived arrangements involving double taxation treaties to obtain relief from withholding taxes on royalties. The changes preventing the use of contrived arrangements have effect for payments made on or after 17 March 2016.

The changes to widen the circumstances in which withholding tax must be deducted from payments of royalties will be introduced later in the passage of Finance Bill 2016 and will have effect for payments made on or after the date of Royal Assent to the Finance Bill 2016.

1.9. Loans to participators and other arrangements: rate of tax. As announced at Budget 2016, legislation will be introduced in Finance Bill 2016 to specifically link the rate of tax chargeable on loans or advances to, or arrangements conferring benefits on, participators made by close companies to the higher dividend rate. The rate will be increased from 25% to 32.5%. The new rate will apply to loans made or benefits conferred on or after 6 April 2016. Capital gains tax

1.10. Capital Gains Tax: Changes to rates. Legislation will be introduced in Finance Bill 2016 to reduce the rate of CGT charged on most gains accruing to basic rate taxpayers from 18% to 10%. For higher rate taxpayers, or those whose gains exceed the unused part of their basic rate tax band, the rate of CGT charged on most gains will be reduced from 28% to 20%. The 28% and 18% rates will continue to apply for gains accruing on the disposal of interests in residential properties that do not qualify for Private Residence Relief,and the receipt of carried interest. The rate of CGT charged on Annual Tax on Enveloped Dwellings related chargeable gains will continue to be 28%. These changes will have effect from 6 April 2016.

1.11. Capital Gains Tax – entrepreneurs’ relief and associated disposals. Legislation will be introduced in Finance Bill 2016 to allow claims to entrepreneurs’ relief in certain cases where relief ceased to be due as a result of changes in Finance Act 2015. In particular, relief will be due, subject to conditions, on an ‘associated disposal’ of a privately- Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 3 | P a g e held asset when the accompanying disposal of business assets is to a family member. Relief can also be claimed in some cases where the disposal of business assets does not meet the present 5% minimum size condition. These changes have effect for disposals on or after 18 March2015.

1.12. Capital Gains Tax – entrepreneurs’ relief and disposals of goodwill. Legislation will be introduced in Finance Bill 2016 to allow claims to entrepreneurs’ relief in certain cases where relief ceased to be due as a result of changes in Finance Act 2015. In particular, relief will be due, subject to conditions, on gains on the goodwill of a business when that business is transferred to a company controlled by five or fewer persons or by its directors. These changes have effect for disposals on or after 3 December 2014.

1.13. Capital Gains Tax – entrepreneurs’ relief: definition of a trading company etc. Legislation will be introduced in Finance Bill 2016 to allow claims to entrepreneurs’ relief in certain cases where relief ceased to be due as a result of changes in Finance Act 2015. The definitions of a trading company and trading group which apply for entrepreneurs’ relief purposes will be amended. This will allow a percentage of the activities of a joint venture company to be treated as carried on by a company which holds shares in that company. Where the new definitions apply, trading activities of a company in its capacity as a partner in a firm may be taken into account as such rather than treated as being non-trading. These changes have effect for disposals on or after 18 March 2015.

1.14. Capital Gains Tax – entrepreneurs’ relief: extension to long-term external investors. Legislation will be introduced in Finance Bill 2016 applying a 10% rate of Capital Gains Tax (CGT) to gains accruing on the disposal of ordinary shares in an unlisted trading company held by individuals that were acquired fornew consideration. The qualifying gains will be subject to a separate lifetime limit of £10 million. This legislation will apply to qualifying shares bought on or after 17 March 2016, and held for a period of at least three years starting from 6 April 2016.

1.15. Changes to Employee Shareholder Status. As announced at Budget 2016, legislation will be introduced in Finance Bill 2016 to place a lifetime limit of £100,000 on the gains that a person with Employee Shareholder Status can make on the disposal of Employee Shares exempt from Capital Gains Tax. The change will take effect in relation to Employee Shareholder shares acquired in consideration of an Employee Shareholder agreement entered into from midnight at the end of 16 March 2016, and to gains on such shares. Inheritance Tax

1.16. Inheritance Tax: Downsizing and the residence nil-rate band. As announced at Summer Budget 2015, legislation will be introduced in Finance Bill 2016 to ensure that the residence nil-rate band will be available in cases where a person downsizes or ceases to own a home and other assets are passed on death to direct descendants. Following consultation, the draft legislation will be revised to clarify when a disposal has occurred, to ensure that certain disposals made by trustees will also be taken into account, and to ensure that the provisions relating to cases involving conditionally exempt assets work as intended. These changes will apply for deaths on or Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 4 | P a g e after 6 April 2017 where the deceased downsized or disposed of a property on or after 8 July 2015. VAT

1.17. Changes to VAT representatives legislation and the introduction of joint and several liability on the online marketplaces. Legislation will be introduced in Finance Bill 2016 to: (a) amend section 48 of the VAT Act 1994 to strengthen the existing rules that enable HMRC to direct overseas businesses selling goods in the UK to appoint a VAT representative with joint and several liability and/or provide security for the VAT that becomes due; and (b) hold an online marketplace jointly and severally liable for the VAT that an overseas business selling goods via the online marketplace fails toaccount for. Stamp duty Land Tax

1.18. Reform of charging provisions for Stamp Duty Land Tax (SDLT) on non- residential property. SDLT on purchases of non- residential property is being reformed with effect on or after 17 March 2016. SDLT will be payable at each rateon the portion of the purchase price which falls within each band, rather than at a single rate on the whole transaction value. The rates and thresholds for freehold and lease premium transactions, as well as leasehold rent transactions, are also being amended as part of thisreform. For freehold and lease premium transactions the portion of the transaction value up to £150,000 is charged at a rate of 0%, the portion of the transaction value between £150,001 and £250,000 is charged at a rate of 2% and the portion over £250,001 is charged at a rate of 5%. For leasehold rent transactions the portion of the net present value of the rent (NPV) up to £150,000 is charged at a rate of 0%, the portion of the NPV between £150,001 and £5,000,000 is charged at a rate of 1%and the portion of the NPV over £5,000,000 is charged at a rate of 2%.

1.19. Higher rate of Stamp Duty Land tax (SDLT) on additional residential properties. As announced at the Spending Review and Autumn Statement 2015, legislation will be introduced in Finance Bill 2016 to apply higher rates of SDLT, 3 percentage points above the existing rates, for purchases of additional residential properties on or after 1 April 2016. 1.20. Annual Tax on Enveloped Dwellings and 15% rate of Stamp Duty Land Tax (SDLT): Widening the Scope of the Reliefs. As announced

1.20. Annual Tax on Enveloped Dwellings and 15% rate of Stamp Duty Land Tax (SDLT): Widening the Scope of the Reliefs. As announced at the Spending Review and Autumn Statement 2015, the scope of the reliefs available from these charges will be extended where a residential property is held for the purposes of an Equity Release Scheme (Home Reversion Plan), occupied by certain employees, or acquired for demolition or conversion into nonresidential use. Following consultation on the draft legislation some amendments have been made of a minor technical nature. These changes will come into effect from 1 April2016. Indirect taxes 1.21. Insurance Premium Tax. Legislation will be introduced in Finance Bill 2016 to increase the standard rate of Insurance Premium Tax (IPT) to 10%. The change will take effect on 1 October 2016. The rate rise will help to pay for flood defences and resilience. Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 5 | P

1.21. Insurance Premium Tax. Legislation will be introduced in Finance Bill 2016 to increase the standard rate of Insurance Premium Tax (IPT) to 10%. The change will take effect on 1 October 2016. The rate rise will help to pay for flood defences and resilience. Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 5 | P a g e Tax administration 1.22. Strengthening civil deterrents for offshore evasion. As announced

1.22. Strengthening civil deterrents for offshore evasion. As announced at Budget 2016, and following publication of draft legislation on 9 December 2015, Finance Bill 2016 will include legislation to increase minimum penalties for deliberate offshore tax evasion, require greater levels of disclosure for penalty reductions, remove protection from naming for unprompted disclosures, and allow naming provisions to name individuals who look to hide their evasion behind companies and other entities. This introduces an additional penalty for serious cases of deliberate offshore evasion, which is equivalent to up to 10% of the underlying asset value. This will come into force from to Finance Bill 2016. 1.23. Simple Assessment. As announced at Spending Review and Autumn Statement 2015, legislation will be introduced in Finance Bill 2016 to provide a new power to allow HMRC to make an assessment of a person’s income tax or capital gains tax liability without them first being required to complete a self-assessment return and where it has sufficient information about that individual to make the assessment. Following consultation on the

1.23. Simple Assessment. As announced at Spending Review and Autumn Statement 2015, legislation will be introduced in Finance Bill 2016 to provide a new power to allow HMRC to make an assessment of a person’s income tax or capital gains tax liability without them first being required to complete a self-assessment return and where it has sufficient information about that individual to make the assessment. Following consultation on the

1.23. Simple Assessment. As announced at Spending Review and Autumn Statement 2015, legislation will be introduced in Finance Bill 2016 to provide a new power to allow HMRC to make an assessment of a person’s income tax or capital gains tax liability without them first being required to complete a self-assessment return and where it has sufficient information about that individual to make the assessment. Following consultation on the draft legislation for Simple Assessment as published on 9 December 2015 the government has increased the time limit for customers to dispute the amount due in their assessment to 60 days and have clarified the arrangements forr interest and late payment penalties to bring these in line with interest and late payment penalties for Self-Assessment. This measure will have effect on and after the date of Royal Assent to Finance Bill 2016. 2. Future tax changes Income tax Domicile 2.1. Reform of domicile rules and Inheritance tax. The government is undertaking a major reform to non-domicile taxation. As announced at Summer Budget 2015, from April 2017 non-UK domiciled individuals (non-doms) will be deemed UK domiciled for all tax purposes after they have been UK resident for 15 out of the past 20 tax years. Additionally, individuals who were born in the UK and who have a UK domicile of origin will revert to their UK domiciled status for tax purposes while resident in the UK. The government will also legislate to charge inheritance tax on all UK residential property indirectly held through an offshore structure from 6 April 2017. As set out at Summer Budget 2015,

2. Future tax changes Income tax Domicile 2.1. Reform of domicile rules and Inheritance tax. The government is undertaking a major reform to non-domicile taxation. As announced at Summer Budget 2015, from April 2017 non-UK domiciled individuals (non-doms) will be deemed UK domiciled for all tax purposes after they have been UK resident for 15 out of the past 20 tax years. Additionally, individuals who were born in the UK and who have a UK domicile of origin will revert to their UK domiciled status for tax purposes while resident in the UK. The government will also legislate to charge inheritance tax on all UK residential property indirectly held through an offshore structure from 6 April 2017. As set out at Summer Budget 2015,

2.1. Reform of domicile rules and Inheritance tax. The government is undertaking a major reform to non-domicile taxation. As announced at Summer Budget 2015, from April 2017 non-UK domiciled individuals (non-doms) will be deemed UK domiciled for all tax purposes after they have been UK resident for 15 out of the past 20 tax years. Additionally, individuals who were born in the UK and who have a UK domicile of origin will revert to their UK domiciled status for tax purposes while resident in the UK. The government will also legislate to charge inheritance tax on all UK residential property indirectly held through an offshore structure from 6 April 2017. As set out at Summer Budget 2015, nondoms who have a non-UK resident trust set up before becoming deemed domiciled in the UK will not be taxed on income and gains retained in the trust. The government will legislate all non-dom reforms in Finance Bill 2017. Budget 2016 confirms that nondoms who become deemed-domiciled in April 2017 can treat the cost base of their non-UK based assets as being the market value of that asset on 6 April 2017. Individuals who expect to become deemed UK domicile under the 15 out of 20 year rule will be subject to transitional provisions with regards to offshore funds to provide certainty on how amounts remitted to the UK will be taxed. Employment income taxation and benefits in kind 2.2. Salary Sacrifice for Provision of Benefits in Kind. As announced

2.2. Salary Sacrifice for Provision of Benefits in Kind. As announced at Budget 2016, the government will consider limiting the range of benefits that attract income tax and National Insurance contributions (NICs) advantages when they Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 6 | P a g e are provided as part of salary sacrifice schemes. However, the government’s intention is that pension saving, childcare, and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements. 2.3. Exemption for

2.3. Exemption for employer provided pensions advice. As announced at Budget 2016, legislation will be introduced by statutory instrument under the minor benefits provisions to introduce a new income tax exemption and a corresponding National Insurance disregard for financial advice on pensions for the first £500 ofthe cost of provision, where the advice is arranged by the employer. This will come into effect from 6 April 2017. The existing tax relief for employer-provided pensions advice, which has been in force since 2004, will be repealed as the new tax relief extends to tax advice on pensions, and the existing provision will become otiose. 2.4. Pensions Advice Allowance. As announced

2.4. Pensions Advice Allowance. As announced at Budget 2016, the government will consult over summer 2016 on introducing a Pensions Advice Allowance. This will allow people to withdraw £500 tax free, before the age of 55, from their defined contribution pension to redeem against the cost of financialadvice. 2.5. Termination Payments. As announced

2.5. Termination Payments. As announced at Budget 2016, the government will clarify and tighten the rules about the taxation of termination payments. This will include introducing legislation to clarify that all payments in lieu of notice and certain damages payments are taxable as earnings and removing foreign service relief. The government will also be aligning the employer NICs and tax treatments of termination payments, so employers will have to pay NICs on the elements of termination payments that exceed £30,000. These changes will be legislated in Finance Bill 2017 and a future NICs Bill and will take effect from April 2018. A technical consultation will be published over the summer. Trading income etc 2.6. Business Premises Renovation Allowance (BPRA). As announced

2.6. Business Premises Renovation Allowance (BPRA). As announced at Budget 2016, the Business Premises Renovation Allowance will expire in 2017 as legislated in Finance Act 2012. BPRA will end on 31 March 2017 for CorporationTax and 5 April 2017 for Income Tax respectively. BPRA will not be extended after those dates. 2.7. Partnership taxation: Proposals to clarify tax treatment. As announced

2.7. Partnership taxation: Proposals to clarify tax treatment. As announced at Budget 2016, the government will consult on proposals to clarify the taxation treatment of partnerships in particular circumstances.

2.8. Property and Trading Income Allowances.The government announced at Budget 2016 the introduction of a £1000 allowance for property income and a £1000 allowance for trading income from the 2017 to 2018 tax year. The new allowances will mean that individuals with property income below £1000 or trading income below £1000 will no longer need to declare or pay tax on that income. Those with income above the allowance will be able to calculate their taxable profit either by deducting their expenses in the normal way or by simply deducting the relevant allowance from their gross income. Legislation will be introduced in Finance Bill 2017. Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 7 | P a g e

2.9. Lifetime Individual Savings Account. As announced at Budget 2016, legislation will be introduced to provide a Lifetime Individual Savings Account (Lifetime ISA). The Lifetime ISA will be available from April 2017 for adults under the age of 40. They will be able to contribute up to £4,000 per year, and receive a 25% bonus from the government. Funds from the Lifetime ISA, including the government bonus, can be used to buy a first home at any time from 12 months after the account opening, and be withdrawn from age 60. The government also announced that the annual ISA subscription limit willbe increased to £20,000 from 6 April 2017. This applies to allsavers. Capital allowances

2.10. Capital allowances: business cars firstyear allowance (FYA). The government will extend the 100% FYA for businesses purchasing low emission cars for a further three years to April 2021. From April 2018 the carbon dioxide emission threshold below which cars are eligible for the FYA will also be reduced from 75 grams/kilometre to 50 grams/kilometre. From April 2018, the government will reduce the carbon dioxide emission threshold for the main rate of capital allowances for business cars from 130 grams/kilometre to 110 grams/kilometre. The government will review the case for the FYA and the appropriate emission thresholds from 2021 at Budget 2019.

2.11. Announcement of New and Extended Enterprise Zones (EZs). The government has announced the creation of three new Enterprise Zones and the extension of an existing Zone. Secondary legislation will be introduced in 2016 toset out the specific areas which will able to receive the Enhanced Capital Allowance (ECAs). ECAs in EZs are available to qualifying companies on qualifying expenditure. ECAs provide a cashflow advantage by allowing companies to write off such expenditure more quickly for tax purposes. Corporation tax

2.12. Corporation Tax – Tax deductibility of corporate interest expense. As announced at Budget 2016, the government will introduce new rules to limit thetax relief that companies can claim for their interest expenses. In October 2015, the OECD published its recommendations for best practice in this area as one of the outputs from its Base Erosion Profit Shifting (BEPS) project. The government has consulted on the merits and general framework of the recommendations and has decided to introduce rules to limit interest deductions by companies. More information is included in the government’s business tax road map published at Budget. Existing commercial arrangements within the oil and gas ringfence regime will not be adversely affected. After further consultation during the spring and summer on the detailed design, the government will publish draft legislation for inclusion in Finance Bill 2017. The new rules will come into effect from 1 April 2017. 2.13. Corporation Tax: reform of loss relief. As announced

2.13. Corporation Tax: reform of loss relief. As announced at Budget 2016, the government will reform the rules governing certain corporate losses carried forward from earlier periods. Firstly, the reform will give all companies more flexibility by relaxing the way in which they can use losses arising on or after 1 April 2017 when they are carried forward. These losses will be useable against profits from different types of income and other group companies. Secondly, companies will have their use Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 8 | P a g e of carried forward losses restricted so that they cannot reduce their profits arising on or after 1 April 2017 by more than 50%. This restriction will apply to a company or group’s profits above £5m. Carried forward losses arising at any timewill be subject to the restriction. For banking companies, losses that are within the separate bank loss restriction will continue to be subject to those rules (see ‘Bank loss relief restriction: amendment to restriction’). Profits and losses subject to the oil and gas ring-fence regime will be excluded from the loss reform. Following a consultation later in 2016 on the detailed design and implementation of the reform, legislation will be introduced in Finance Bill 2017. 2.14. Reform of the Substantial Shareholdings Exemption. As announced

2.14. Reform of the Substantial Shareholdings Exemption. As announced at Budget 2016, as part of the Business Tax Roadmap, the government will consult on possible reform of the Substantial Shareholdings Exemption for corporate Capital Gains. 2.15. Office of Tax Simplification small companies review. As announced

2.15. Office of Tax Simplification small companies review. As announced at Budget 2016, the government has received the OTS’s review of small companies and will accept or consider nearly all of its recommendations, including that the OTS continues to develop the design for a look-through taxation system and a new simple business model that protects the assets of the self-employed. 2.16. Corporation tax: payment dates for very large companies. As announced

2.16. Corporation tax: payment dates for very large companies. As announced at Budget 2016, the commencement of rules advancing quarterly instalment payments for very large companies (those with profits above £20m) is deferred for two years, so they will have effect for accounting periods commencing on or after 1 April 2019. This follows representations on draft secondary legislation (regulations) and gives companies more time to transition to the new payment schedule of quarterly instalments at months 3, 6, 9 and 12 of a 12-month accounting period, which was announced at Summer Budget 2015. The final regulations will reflect this change to give effect to the new commencement rule. Inheritance Tax 2.17. Property held through offshore structures- inheritance tax. As announced

2.17. Property held through offshore structures- inheritance tax. As announced at Budget 2015, the government will consult on proposals to ensure that from 6 April 2017 all UK residential property held indirectly through an offshore structure or trust is chargeable to inheritance tax. Legislation will be introduced in Finance bill 2017 following a consultation on the details. VAT 2.18. VAT: revalorisation of registration and deregistration thresholds. As announced at Budget 2016, secondary legislation will amend the VAT Act 1994to increase the VAT registration and deregistration thresholds in line with inflation so that: (a) the taxable turnover threshold which determines whether a person mustbe registered for VAT, will be increased from £82,000 to £83,000 (b) the taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £80,000 to £81,000 (c) the registration and deregistration threshold for relevant acquisitions from

2.18. VAT: revalorisation of registration and deregistration thresholds. As announced at Budget 2016, secondary legislation will amend the VAT Act 1994to increase the VAT registration and deregistration thresholds in line with inflation so that: (a) the taxable turnover threshold which determines whether a person mustbe registered for VAT, will be increased from £82,000 to £83,000 (b) the taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £80,000 to £81,000 (c) the registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £82,000 to £83,000. HMRC will simultaneously introduce corresponding increases in the thresholds for Income Tax self-assessment ‘three line accounts’ Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 9 | P a g e and the Income Tax CashBasis. These changes will be effective from 1 April 2016. 2.19. Soft Drinks Industry Levy. As announced

2.19. Soft Drinks Industry Levy. As announced at Budget 2016, the government will introduce legislation in Finance Bill 2017 to encourage the reformulation of drinks that are high in added sugar by levying a unit charge on UK producers and importers of such drinks. There will be an exemption for smaller producers. HMRC will consult on the detail in summer 2016 and the levy will come into effect in 2018. Tax administration 2.20. Defining reasonable care. As announced

2.20. Defining reasonable care. As announced at Budget 2016, the government will consider clarifying in statute what constitutes ‘reasonable care’ in avoidance penalty cases, to include making clear that avoiders cannot rely on generic, third party legal advice received via the promoter or other enabler of thescheme’. 2.21. Tackling avoidance enablers. As announced

2.21. Tackling avoidance enablers. As announced at Budget 2016, the government intends to explore new options to ensure that avoidance scheme promoters and other intermediaries who ‘enable’ scheme sale and use face greater, direct consequences when one of their schemesfails. 2.22. Modernising the VAT Disclosure Regime (VADR). As announced

2.22. Modernising the VAT Disclosure Regime (VADR). As announced at Budget 2016, the government intends to consult over the summer on reform of the VAT Disclosure Regime (VADR) to expand coverage to other indirect taxes and align more closely with the Disclosure of Tax Avoidance Schemes (DOTAS) model which covers direct taxes. 2.23. Business Tax – Making Tax Digital. At the March 2015 Budget, the government committed to

2.23. Business Tax – Making Tax Digital. At the March 2015 Budget, the government committed to transform the tax system through digital technology and end the need for annual tax returns. At the Spending Review and Autumn Statement 2015, the government announced a major investment in HMRC to deliver this as well as a new requirement on businesses, self-employed people and landlords to keep digital records and provide updates to HMRC at least quarterly. As part of this transformation, HMRC will publish a number of consultations later in 2016 covering use of digital tools to keep records and report information to HMRC, options to make greater use of third party data to prepopulate digital tax accounts and changes to the tax administration framework reflecting the transition to digital. The government will respond to these consultations at Autumn Statement 2016 with draft legislation for Finance Bill 2017. In addition, and to make further progress towards this vision, the Budget announces that from 2018 businesses, self-employed people and landlords who are keeping their records digitally and providing regular digital updates to HMRC will be able to adopt pay-as-you-go tax payments, enabling them to choose payment patterns that suit them and better manage their cash flow. The government will consult in 2016 on how best to implement a pay-as-you-go system.

2.24. Simplifying tax rules for businesses, self-employed and landlords. The government will also consult on a number of further options to simplify the tax rules for small businesses and ensure regular updates work smoothly.

2.25. Offshore evasion requirement to correct. As announced

2.26. Abolishing Class 2 National Insurance contributions (NICs). As announced at Budget 2016, the government will abolish Class 2 NICs from April 2018. The government will publish its response to the recent consultation on benefit entitlement for the self-employed in due course. This will set out details of how the self-employed will access contributory benefits after Class 2 is abolished. The government will legislate for these changes in a forthcoming NICs

2.25. Offshore evasion requirement to correct. As announced at Budget 2016, the government will introduce a new legal requirement Budget 2016 – Overview 16th March 2016 (‘Budget Day’) Date of publication of Finance Bill – 24th March 2016 Tel: (01727) 730 550 10 | P a g e for taxpayers to come forward and correct any past offshore non-compliance with new sanctions for failure to do so. The new requirement will underpin the offshore disclosure facility and operate ahead of the widespread reporting of information under the Common Reporting Standard in 2018. A formal consultation on the detail of the requirement will be published later this year. 2.26. Abolishing Class 2 National Insurance contributions (NICs). As announced at Budget 2016, the government will abolish Class 2 NICs from April 2018. The government will publish its response to the recent consultation on benefit entitlement for the self-employed in due course. This will set out details of how the self-employed will access contributory benefits after Class 2 is abolished. The government will legislate for these changes in a forthcoming NICs

2.26. Abolishing Class 2 National Insurance contributions (NICs). As announced at Budget 2016, the government will abolish Class 2 NICs from April 2018. The government will publish its response to the recent consultation on benefit entitlement for the self-employed in due course. This will set out details of how the self-employed will access contributory benefits after Class 2 is abolished. The government will legislate for these changes in a forthcoming NICs