Finance Bill 2015 draft legislation overview

Personal allowance 2015-16 (for people born after 5 April 1938)

As announced at Autumn Statement legislation will be introduced in Finance Bill 2015 to increase the income tax personal allowance for 2015-16 for people born after 5 April 1938 to £10,600. The basic rate limit will be £31,785 so the higher rate threshold above which individuals pay income tax at 40% will be increased to £42,385. National Insurance limits will increase to stay in line with the higher rate threshold. Rates of income tax will remain at 2014-15 levels in 2015-16. (TIIN)

Finance Bill 2015

Blind person's allowance, married couple's allowance and income limit for 2015-16

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to increase blind person's allowance, the married couple's allowance available to people born before 6 April 1935 and the income limits by amounts equivalent to Retail Price indexation. (TIIN)

Legislation was introduced in Finance Act 2014 to change the basis of uprating income tax to the Consumer Prices Index. Budget 2011 announced that these allowances and the income limit would continue to be indexed by reference to the Retail Prices Index over the lifetime of this Parliament.

Finance Bill 2015

Benefits in kind

Company car tax rates 2017-18 and 2018-19

As announced at Budget 2013 and Budget 2014, legislation will be introduced in Finance Bill 2015 to increase the appropriate percentages for calculating the benefit charge for cars with a CO2 emissions figure of more than 75 grammes of carbon dioxide per kilometre (gCO2/km) in both 2017-18 and 2018-19. The legislation also sets the differential between the 0-50 and the 51-75 gCO2/km bands in 2017-18 and 2018-19.

The legislation will also increase the appropriate percentage for cars without a CO2 emissions figure and for cars registered before 1 January 1998, in both 2017-18 and 2018-19.

The legislation sets the maximum percentage for diesel cars registered on or after 1 January 1998 for 2015-16. (TIIN)

Finance Bill 2015

Van benefit charge for zero emission vans

As announced at Budget 2014, legislation will be introduced in Finance Bill 2015 to increase the current van benefit charge of £nil for vans which do not emit CO2 (zero emission vans), beginning in 2015-16. The van benefit charge for zero emission vans will be 20% of the value of the van benefit charge for vans which emit CO2 in 2015-16, 40% in 2016-17, 60% in 2017-18, 80% in 2018-19 and 90% in 2019-20. From 2020-21, there will be a single van benefit charge applying to all vans. (TIIN)

Finance Bill 2015

Employee benefits and expenses - Abolition of the £8,500 threshold for benefits in kind (BiKs)

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to abolish the £8,500 threshold for BiKs from 6 April 2016. This follows the announcement at Budget 2014 and public consultation over the summer. A new exemption for Ministers of Religion earning less than £8,500 will be introduced to ensure that their BiKs remain exempt from income tax, and exemption from income tax will be introduced on the BiKs for carers who receive board and lodging in the home of the person that they are providing care for. Corresponding disregards will also be introduced for National Insurance Contributions purposes. A summary of responses to the public consultation was published on 10 December 2014. (TIIN)

Finance Bill 2015

Simplifying the administration of employee benefits and expenses, including preventing salary sacrifice

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to exempt from tax certain expenses payments and benefits in kind provided to employees. This follows the announcement at Budget 2014 and public consultation over the summer. The legislation will apply where employees would have been eligible for tax relief if they had incurred and met the cost of the expenses or benefits themselves. This exemption replaces the rules that require employers to either apply to HMRC for an agreement known as a 'dispensation' so that they can provide expenses and benefits free of tax and National Insurance contributions, or to report such expenses and benefits to HMRC. However the exemption will not apply where expenses are paid as part of a salary sacrifice arrangement. These changes will have effect from 6 April 2016. A summary of responses to the public consultation was published on 10 December 2014. (TIIN)

Finance Bill 2015

Employee benefits and expenses - Statutory exemption for trivial benefits in kind (BiKs)

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to provide a statutory exemption from tax, and no liability to National Insurance contributions, for qualifying trivial BiKs costing £50 or less. This follows the announcement at Budget 2014 and public consultation over the summer. Previously employers were required to report such BiKs to HMRC or agree with HMRC that a BiK could be counted as trivial. Employers will no longer be required to report such benefits on either form P11D or via Pay as You Earn Settlement Agreements (PSAs) at the year end. These changes will have effect from 6 April 2015. A summary of responses to the public consultation was published on 10 December 2014. (TIIN)

Finance Bill 2015

Employees benefits and expenses - Real time collection of tax through voluntary payrolling

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to enable HMRC to set out the statutory framework for voluntary payrolling for employers in Regulations. This follows the announcement at Budget 2014 and public consultation over the summer. A summary of responses to the public consultation was published on 10 December 2014. (TIIN)

Finance Bill 2015

Tax exemption for travel expenses of members of local authorities

As announced at Autumn Statement, and following a Written Ministerial Statement on 22 July 2014, legislation will be introduced in Finance Bill 2015 to exempt from income tax travel expenses paid to councillors by their local authority. The exemption will be limited to the Approved Mileage Allowance Payment (AMAPs) rates where it applies to mileage payments. There will be a corresponding disregard from Class 1 NICs. (TIIN)

Finance Bill 2015

Overarching contracts of employment and temporary workers

As announced at Autumn Statement, the Government will review the increasing use of overarching contracts of employment by employment intermediaries such as 'umbrella companies'. These arrangements enable workers to obtain tax relief for home to work travel that would not ordinarily be available. The Government will publish a discussion paper shortly to inform possible action at Budget 2015.

Other income tax

Deductions at a fixed rate

Finance Bill 2015 will include legislation to amend legislation for simplified expenses first enacted in Finance Act 2013 (see Chapter 5A Part 2 Income Tax (Trading and Other Income) Act 2005 (ITTOIA)). The sections to be amended are sections 94H and 94I ITTOIA. These sections relate to claims for simplified expenses as they apply for the business use of a home and where premises are used both for business premises and as a home. A Tax Impact Assessment was published with the original legislation contained within Finance Bill 2013 on 20 March 2013 and that assessment covers impact from these proposed amendments. These amendments ensure that where appropriate partnerships can apply the simplified expenses rules.

Finance Bill 2015

Bereavement support payment: exemption from income tax

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to make Bereavement Support Payment (BSP) amounts tax exempt. The Pensions Act 2014 introduced the BSP that will be paid by the Department for Work and Pensions to eligible bereaved husbands, wives and civil partners from a date to be set by the Secretary of State or the Treasury.

BSP will be paid to those who meet the qualifying conditions from the commencement date. The tax treatment of the existing benefits and pensions already in payment, which will be replaced for new claimants by the BSP, will not be affected. (TIIN)

Finance Bill 2015

Lump sums provided under Armed Forces Early Departure Scheme

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to amend the existing income tax exemption for lump sum payments made under the Armed Forces Early Departure Payment (EDP) scheme 2005, to ensure that lump sum payments made under the new EDP 2015 scheme are also exempt. There will be a corresponding disregard from Class 1 National Insurance contributions (NICs). This change will take effect from 1 April 2015, when the new scheme is introduced. (TIIN)

Finance Bill 2015

Gift aid digital: role of intermediaries

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to allow intermediaries a greater role in administering Gift Aid. The new legislation will make it easier for donors to give to charity through an intermediary, such as an independent fund raiser, by reducing the number of times a donor has to repeat information needed by HMRC to check the validity of a claim for Gift Aid.

The changes will also enable HMRC to adopt a more flexible approach to what information charities need to obtain from the individual and provide to HMRC in relation to Gift Aid claims. (TIIN)

Finance Bill 2015

Bad debt relief on peer-to-peer lending

As announced at Autumn Statement, new legislation will be introduced to allow individuals who make loans through peer-to-peer (P2P) platforms to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6 April 2015. Legislation will be included in Finance Bill 2016 and the Government will publish draft legislation in 2015. The Government will also consult with industry about developing new withholding tax rules for P2P platforms.

Finance Bill 2016

Flood defence relief

As announced at the Autumn Statement, legislation will be introduced in Finance Bill 2015 to ensure that contributions by both companies and unincorporated businesses to partnership funding schemes for flood defences will be deductible for income tax and corporation tax purposes. The legislation will apply to contributions made on or after 1 January 2015, and relief is available both for monetary contributions and for the cost of the contribution of services. (TIIN)

Finance Bill 2015

Taxation of resident non-domiciles: remittance basis charge

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to change the annual charge paid by non-domiciled individuals resident in the UK who wish to retain access to the remittance basis of taxation. The charge for individuals who have been resident in the UK for at least 12 of the last 14 years will be increased to £60,000 and a new charge of £90,000 will be payable by individuals who have been resident in the UK for at least 17 of the 20 tax years. The charge for individuals who have been UK resident for at least 7 of the last 9 years is unchanged. The changes will take effect from 6 April 2015. The Government will also consult on making the election to pay the remittance basis charge apply for a minimum of three years. (TIIN)

Finance Bill 2015

Investment managers - disguised fee income

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to ensure that all sums which arise to investment fund managers for their services are charged to income tax. It will affect sums which arise to managers who have entered into arrangements involving partnerships or other transparent vehicles, but not sums linked to performance, often described as carried interest, nor returns which are exclusively from investments by partners.

The changes will take effect in respect of sums arising on or after 6 April 2015, whenever the fund was set up or the arrangements were entered into. (TIIN)

Finance Bill 2015

Individual Savings Accounts (ISAs)

ISAs transfer to spouses on death

As announced at Autumn Statement, legislation will be introduced, effective from 2015-16, to allow savers an additional ISA investment allowance where their spouse or civil partner dies on or after 3 December 2014. This allowance will be set at the value held in the deceased person's ISA on their date of death. Draft secondary legislation for this change will be published shortly. A TIIN will accompany the Statutory Instruments when they are published.

The Government will continue to examine the issue of taxation of former ISA assets during the administration of the estate, and will look to legislate in the next Parliament to extend the current ISA tax advantages into this administration period.

SI

ISAs new annual subscription limits

As announced at Autumn Statement, the ISA, Junior ISA and Child Trust Fund subscription limits will be increased for 2015-16. These new limits will take effect from 6 April 2015.

The annual ISA subscription limit for 2015-16 will be £15,240.

The annual subscription limit for Junior ISA and Child Trust Funds will be £4,080.

ISAs: qualifying investments including crowdfunded debt securities

As announced at Autumn Statement, the Government will consult on whether crowd funded debt securities should be qualifying investments for ISAs and how this could be implemented.

Venture Capital Schemes and Social Investment Tax Relief

Venture Capital Schemes: Social Investment Tax Relief (SITR)

As announced at Budget 2014, and following consultation over the summer, legislation will be introduced to extend the scope of the Social Investment Tax Relief scheme. The amount that can be invested in an individual organisation will be increased. The current limit of £275,000 over a 3 year period will be replaced with a new annual investment limit of £5 million, with an overall limit of £15 million on total investment. In addition, legislation will be introduced in Finance Bill 2015 to extend SITR to social enterprises that engage in small scale horticultural and agricultural activities that will no longer qualify for subsidies under the Common Agricultural Policy reforms.

The changes will take place as soon as possible on or after 6 April 2015, subject to receiving state aids clearance.

A technical consultation will be carried out in early 2015 on further changes to extend SITR to a wider range of social impact bonds and to provide for qualifying investments to be made indirectly, through a social investment form of a venture capital trust scheme, a 'Social VCT'. (TIIN)

Finance Bill 2015

Venture Capital Schemes: Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS), Venture Capital Trusts (VCTs) and Social Investment Tax Relief (SITR)

As announced at Budget 2014, and following consultations over the summer, legislation will be introduced in Finance Bill 2015 to extend SITR to community energy generation undertaken by qualifying organisations with effect from the date of the expansion of SITR, at which point it will cease to be eligible for the EIS, SEIS and VCTs. All other companies benefiting substantially from subsidies for the generation of renewable energy will be excluded from also benefiting from the EIS, SEIS and VCTs with effect from 6 April 2015. This will remove the current exceptions where anaerobic digestion or hydroelectric power is involved. Contract for Difference subsidies, which will replace Renewable Heat Incentives and Renewables Obligation Certificates in due course, will also be excluded from EIS, SEIS and VCTs.

The changes will take effect for investments involving anaerobic digestion, hydroelectric power and Contract for Difference subsidies in relation to shares issued on or after 6 April 2015 for the EIS and SEIS and, for VCTs, in respect of qualifying holdings issued on or after that date.

The changes will take effect for community energy schemes as soon as possible on or after 6 April 2015, when the changes to extend the SITR are implemented, subject to State aid clearance.

A new online system will be introduced in 2016 for the EIS, the SEIS and SITR, making it easier for investors and companies to access and use the schemes. (TIIN)

Finance Bill 2015

Special purpose share schemes (commonly known as 'B share schemes')

As announced at Autumn Statement, legislation will be introduced to remove the unfair tax advantage offered by special purpose share schemes. From 6 April 2015, if a shareholder is given a choice between receiving a distribution chargeable to income tax or an alternative receipt of substantially the same value, the alternative receipt will be subject to income tax if that choice is taken. (TIIN)

Finance Bill 2015

Miscellaneous loss relief

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to counter avoidance of income tax involving miscellaneous losses. This measure will deny relief where a loss, or income against which a loss could otherwise be relieved, arises as a result of arrangements to which a person is party, the main purpose, or one of the main purposes, of which is to obtain a reduction in tax liability by means of miscellaneous loss relief. The measure will also limit the miscellaneous income against which a miscellaneous loss may be relieved to miscellaneous income that is chargeable to income tax under the same provision as the loss would have been had it been profits or income instead of a loss. The changes denying relief where losses or income arise from relevant tax avoidance arrangements have effect from 3 December 2014. The changes limiting relief to miscellaneous income of the same type will have effect for tax year 2015-16 and subsequent years. A Tax Information and Impact Note for this measure was published on 3 December 2014. (TIIN)

Finance Bill 2015

Withholding tax exemption for private placements

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to enable regulations to be made providing an exemption from the duty to deduct income tax from interest paid on unlisted securities known as qualifying private placements. (TIIN)

Finance Bill 2015

Capital allowances

Enhanced capital allowances for zero-emission goods vehicles, low emission cars and gas refuelling equipment

As announced at Budget 2014, legislation will be introduced to extend the 100% enhanced capital allowance (ECA) for zero-emission goods vehicles which was due to end in March 2015, to 31 March 2018 for companies and to 5 April 2018 for individuals and partnerships. From 1 April 2015 for companies and 6 April 2015 for individuals and partnerships, the availability of the ECA will also be limited to businesses that do not also claim other state aids, such as the Government's Plug-in Van Grant.

Secondary legislation will be introduced to extend the availability of ECAs for Low CO2 emission cars and gas refuelling equipment to 31 March 2018 for persons within the charge to income tax and corporation tax. (TIIN)

Finance Bill 2015

Bank loss-relief restriction

As announced at Autumn Statement, legislation will be introduced to restrict the proportion of banks' annual taxable profit that can be offset by carried-forward reliefs to 50%. The restriction will apply to: carried-forward trading losses; non-trading loan relationship deficits; and management expenses. The restriction will take effect from 1 April 2015 and will only apply to losses accruing prior to this date. The legislation also contains a targeted anti-avoidance rule, applying to arrangements which create profits in companies with relevant reliefs and have a greater expected tax benefit than commercial. This rule will have the effect of preventing companies from offsetting any relevant reliefs against profit received from such arrangements. (TIIN)

Finance Bill 2015

Hybrid Mismatch Arrangements

As announced at Autumn Statement, the Government is consulting on the implementation of rules to neutralise the effect of hybrid mismatch arrangements in accordance with recommendations of Action 2 of the G20/OECD Base Erosion and Profit Sharing (BEPS) project. The aim is to tackle aggressive tax planning where, within a multinational group, either one party gets a tax deduction for a payment while the other party does not pay tax on the receipt, or there is more than one deduction for the same expense. The UK intends to introduce domestic legislation with effect from 1 January 2017. Introduction of the proposed rules will largely eliminate any tax advantage arising from the use of hybrid entities and instruments and encourage businesses to adopt less complicated and more transparent cross-border investment structures. This consultation seeks comments to inform the UK's contribution to the on-going OECD work on a commentary to the G20/OECD Report on Action 2, and on issues relating to implementation of the recommendations contained in that report which will guide development of legislation in the UK.

Consultation

Consortium Relief: 'link company' rules

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to remove all requirements relating to the location of the consortium 'link company' (the company that is in both a group and a consortium for the purposes of group relief). Previously the link company was required to either be in the UK or the European Economic Area (EEA), with additional requirements where in the EEA. This measure makes the tax system simpler by removing differences in treatment of link companies based in the UK and other jurisdictions. This will take effect for accounting periods beginning on or after 10 December 2014. (TIIN)

Finance Bill 2015

Tax treatment of credit loss allowances

Following the publication in July of the new International Financial Reporting Standard for financial instruments (IFRS 9), legislation will be introduced to ensure that all transition adjustments arising on first adoption of IFRS 9 in respect of credit losses will be spread over a period of 10 years regardless of when the debt falls due to be discharged. This will apply to all companies within the charge to corporation tax. The measure will be given effect by amendments to secondary legislation to be made during 2015.

SI

Accelerated Payments and group relief

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to ensure that the accelerated payments legislation (introduced in Finance Act 2014) works effectively where avoidance arrangements give rise to losses surrendered as group relief. (TIIN)

Finance Bill 2015

Incorporation: restricting relief for internally-generated goodwill transfers between related parties

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to restrict corporation tax relief for internally-generated goodwill and customer related intangible assets acquired by a company from individuals who are related to the company. The change will apply for all acquisitions occurring on or after 3 December 2014. (TIIN)

Finance Bill 2015

Diverted Profits Tax

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 for a new tax on diverted profits from 1 April 2015. The tax will apply to arrangements that erode the UK tax base by the avoidance of a UK permanent establishment, or by the transfer of profits to entities that pay low amounts of tax in situations where there is a lack of economic substance. The tax will apply at a rate of 25% on the diverted profits and will be payable within 30 days after the issue of a charging notice by a designated HMRC officer. Technical guidance for this measure was published today. (TIIN)

Finance Bill 2015

Oil and gas: Reduction in Supplementary Charge

To ensure the UK Continental Shelf continues to attract investment and remove barriers at all stages of the production life cycle, the Government will tomorrow set out major reforms to the oil and gas fiscal regime. As a part of these reforms, the Government will implement an immediate 2% reduction in the rate of the Supplementary Charge, from 32% to 30%, taking effect at 1 January 2015 and will aim to reduce the rate further in an affordable way, to encourage additional investment and drive higher production, sending a strong signal that the UKCS is 'open for business'. (TIIN)

Finance Bill 2015

Oil and Gas: high pressure high temperature cluster area allowance

Budget 2014 announced that a new allowance will be introduced to promote investment in ultra high pressure, high temperature cluster areas. Following consultation, the Government has decided that the allowance will apply to high pressure high temperature cluster areas, not just ultra high pressure high temperature cluster areas.

The allowance will remove an amount equal to 62.5 % of capital expenditure incurred by a company in relation to a cluster area from its adjusted ring fence profits for the purposes of supplementary charge. The allowance will not be available to fields already in receipt of a field allowance, and transitional arrangements will be put in place for companies currently developing projects. The changes will apply to the qualifying capital expenditure a company incurs in relation to a cluster area on or after 3 December 2014. A response to the consultation will be published on 10 December 2014. (TIIN)

Finance Bill 2015

Oil and Gas: extension of accounting periods for Ring Fence Expenditure Supplement

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to extend the number of claims available under Ring Fence Expenditure Supplement from 6 accounting periods to 10, in relation to both offshore and onshore oil and gas activity. As a consequence, Extended Ring Fence Expenditure Supplement will be abolished. This follows a call for evidence on the oil and gas fiscal review over the summer. For claims in addition to their existing 6, companies will not be able to claim supplement on expenditure or losses incurred or supplement generated prior to 5 December 2013. These changes will apply to qualifying expenditure or losses incurred on or after 5 December 2013. For losses arising in an accounting period straddling the commencement date, the changes apportion the losses before and after the commencement date. The initial findings of the review, including a summary of responses were published on 4 December 2014. (TIIN)

Finance Bill 2015

Research & Development (R&D) tax credit relief claims by small businesses

As announced at Autumn Statement, the process for claiming R&D relief will be improved, by introducing voluntary advance assurances for small companies making their first claim. The assurances will allow the company and HMRC to agree details of the claim in advance, promoting certainty and helping companies understand better what expenditure will qualify. HMRC will also improve its R&D guidance after consulting early next year with companies and other interested persons on what needs to change.

The Government will also consult on the issues faced by small businesses when claiming R&D credits in January 2015. (TIIN)

Research and development tax credits: qualifying expenditure

As announced at Autumn Statement, the definition of consumable items qualifying for R&D relief will be amended. Legislation will be introduced to exclude items where, in the circumstances that the R&D activity results in saleable products, those items are reflected in goods that are then sold. The change will have effect from 1 April 2015. (TIIN)

Finance Bill 2015

High end TV tax relief

As announced at Autumn Statement, the Government will explore with industry whether to reduce the minimum UK spending requirement for high-end TV from 25% to 10% and modernise the cultural test, to bring the relief in line with film tax relief.

Children's TV tax relief

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to provide a new tax relief to encourage production of children's television programmes. (TIIN)

Finance Bill 2015

Orchestra tax relief

As announced at Autumn Statement, a consultation will be launched in 2015 on the design of a new corporate tax relief for orchestral productions.

Close company loans to participators

As announced at Autumn Statement, the Government is closing its review into the tax charge on loans from close companies to individuals, trusts and partnerships that have a share or interest in them. The Government does not intend to make any changes to the structure or operation of the tax charge following this review.

Corporate debt and derivative contracts

Following announcement at Budget 2013 of a review, and in the light of subsequent consultation, legislation will be introduced to make wide-ranging changes to update the corporation tax regime for corporate debt and derivative contracts. These include:

o           clarifying the relationship between tax and accountancy, and moving to base taxable profits on amounts recognised as items of profit or loss (to have effect for periods from 1 January 2016)

o           changes to exclude from tax amounts arising where the debts of a company in financial distress are released or modified (to have effect from 1 January 2015).

o           new regime-wide anti-avoidance rules to counter arrangements with a main purpose of obtaining a tax advantage by way of the regime rules (this will have effect from 1 April 2015)

Legislation concerning debts and derivative contracts of partnerships with corporate members or clarifying the tax treatment of undated securities, will not be introduced in Finance Bill 2015. These areas remain under review, but legislation will be deferred for further development. (TIIN)

Finance Bill 2015

Late paid interest

As part of the modernisation of the legislation on corporate debt (loan relationships) announced at Budget 2013, legislation will be introduced to repeal rules concerning loans made to UK companies by a connected company in a non-qualifying territory. Under these rules, where interest is not paid within 12 months of the period for which it accrues, it is only relieved when paid. Similar rules apply to deeply discounted securities. The repeal will have effect for loans entered into on or after 3 December 2014. For loans existing at that date it will be effective for interest accruing after 31 December 2015. A material change to the terms of an existing loan between 3 December 2014 and 31 December 2015 will trigger immediate repeal in respect of that loan. (TIIN)

Finance Bill 2015

R&D rate changes

As announced at Autumn Statement, the rate of the above-the-line Research and Development Expenditure Credit (RDEC) will be increased from 10% to11% and the rate of the R&D tax credit for small or medium sized companies (SMEs) from 225% to 230%. Both of these changes apply to expenditure incurred on or after 1 April 2015.

Finance Bill 2015

Air Passenger Duty (APD) Child Exemption

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to extend the air passenger duty child exemption to children under the age of 12 travelling in the lowest class of travel from 1 May 2015, with a further extension to children under 16 from 1 March 2016. (TIIN)

Finance Bill 2015

VAT: prompt payment discounts

As announced at Autumn Statement, from 1 April 2015 businesses will be required to account for VAT on the actual consideration received when prompt payment discounts are offered. This follows announcement at Budget 2014, legislation in Finance Act 2014, and consultation on implementation between June and September 2014. HMRC will publish a response to the recent consultation shortly.

VAT: refunds to certain bodies

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to provide for refunds of VAT to Non-Departmental Public Bodies, and similar bodies, using certain shared service arrangements to support their non-business activities. (TIIN)

Finance Bill 2015

Refunds of VAT for search and rescue charities and air ambulance

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to provide for refunds of VAT to search and rescue charities in relation to their non-business activities. Search and rescue charities are charities whose main purpose is to search for and rescue people who are or may be at risk of death or serious injury at sea, in coastal waters and inland, charities whose main purpose is to support, develop and promote the activities of such charities, and air ambulance charities. (TIIN)

Finance Bill 2015

VAT: refunds to Highways Agency

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to add companies established under Section 1 of the Infrastructure Bill 2014-15, (currently going through Parliament), to the list of named bodies which are entitled to recover the VAT paid in relation to certain non-business activities. The Infrastructure Bill will provide for the creation of strategic highways companies to take over the functions of the Highways Agency. (TIIN)

Finance Bill 2015

VAT: refunds of VAT for the London Legacy Development Corporation

Secondary legislation will be introduced under section 33(3)(k) of the Value Added Tax Act 1994 to provide for refunds of VAT to the London Legacy Development Corporation whose main purpose is to develop the Olympic Park. This development will provide a sustainable legacy which will have social, economic and environmental benefits for local communities. A draft Statutory Instrument will be published for consultation in the New Year. (TIIN)

SI

Registration of Alcohol Wholesalers

As announced at Autumn Statement 2013, legislation will be introduced in Finance Bill 2015 to require all UK based wholesalers that sell or arrange a sale of alcohol at or after an excise duty point, to be approved by HMRC. It will also make provision to allow regulations to be made regulating the approval and registration of approved persons.

The legislation will also introduce new penalties for trading without approval and for purchasing from an unapproved wholesaler. The requirement to be approved will take effect from 1 January 2016. The scheme will be introduced in full from 1 April 2017. (TIIN)

Finance Bill 2015

Minimum Excise Tax (MET)

As announced at Autumn Statement, the Government is carefully considering the responses to the consultation on whether a MET could help support the tobacco duty regime, which closed on 15 October 2014. A decision on whether to pursue a MET further will be made in due course. A MET works by establishing a minimum tax level for a packet of cigarettes. If the decision is taken to introduce a MET, any legislation will be in a future Finance Bill.

Tobacco Levy

 As announced at Autumn Statement, the Government is publishing a consultation to consider whether to introduce a levy on tobacco manufacturers and importers.

Consultation

Tobacco Anti-Forestalling restrictions

As announced at Autumn Statement, legislation will be included in Finance Bill 2015 to

o           give HMRC a general power in tobacco primary legislation to vary forestalling restrictions from year to year by public notice,

o           give HMRC the power to vary the scope of the restrictions to include other tobacco products,

o           introduce a new financial penalty for non-compliance with the restrictions.

This follows announcement at Budget 2014, and consultation which closed on 4 August 2014. It will take effect in time to apply to forestalling restrictions ahead of the 2016 Budget. A response to the consultation, draft legislation and Information Note covering the changes were published on 10 December 2014. (TIIN)

Finance Bill 2015

Fuel duty: aqua methanol

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to apply a reduced rate of fuel duty to aqua methanol composed of 95% pure methanol and 5 % water, to be implemented from 1 April 2015. The rate of fuel duty applied to aqua methanol will be 7.90 pence per litre. This fuel duty incentive will be reviewed at Budget 2016. (TIIN)

Finance Bill 2015

Aggregates levy: credits in Northern Ireland (NI)

As announced on 7 November 2014, following the recently concluded European Commission state aids investigation into the NI Aggregates Levy Credit Scheme (ALCS), legislation will be introduced to provide for an 80 per cent credit of levy on aggregate commercially exploited in NI following importation from another Member State. The levy paid on this aggregate must have been accounted for at the full rate between 1 April 2004 and 30 November 2010 and the originating quarry must have met required environmental standards. The legislation will take effect on and after the date of Royal Assent to the Finance Bill 2015, with secondary legislation setting out the detailed provisions coming into force around the same time. (TIIN)

Finance Bill 2015

Landfill tax - loss on ignition testing regime

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 and secondary legislation to introduce a loss on ignition (or LOI) testing regime on fines produced from the processing of waste at mechanical treatment plants from 1 April 2015. This follows announcement at Budget 2014 and consultation over the summer. Only qualifying fines with an LOI of 10% or lower will be considered eligible for the lower rate, though there will be a 12 month transitional period where the threshold will be 15%. (TIIN)

Finance Bill 2015

Carbon price floor: exclusion for combined heat and power (CHP)

As announced at Autumn Statement, legislation will be introduced to extend the exclusion from the carbon price support (CPS) rates of climate change levy (CCL) and fuel duty for fossil fuels used in a CHP station. This follows announcement at Budget 2014.

The exclusion currently applies to fuels used to produce heat, steam or mechanical power. From 1 April 2015 it will also include fossil fuels used to generate good quality electricity that is self-supplied or supplied under exemption from the requirement to hold an electricity supplier licence.

Finance Bill 2015 will contain provisions for the CPS rates of CCL and secondary legislation will set out the administrative changes required. Separate secondary legislation will amend the provisions relating to the CPS rates of fuel duty. (TIIN)

Finance Bill 2015

Vehicle excise duty: classic vehicle exemption

As announced at Budget 2014, legislation will be included in Finance Bill 2015 to extend the rolling 40 year VED exemption for classic vehicles by one year from 1 April 2016 to include all vehicles manufactured before 1 January 1976.

Finance Bill 2015

Stamp duty land tax (SDLT): reform of residential rates

As announced at Autumn Statement, a Bill was introduced to charge SDLT on residential property transactions so that each rate will apply to the portion of the purchase price within the relevant band. The legislation sets out new rates and rate bands for these transactions. (TIIN)

SDLT Bill

Application of stamp duty land tax (SDLT) on certain authorised property funds

As announced at Autumn Statement, the Government intends to introduce a seeding relief for property authorised investment funds (PAIFs) and co-ownership authorised contractual schemes (CoACSs) and intends to make changes to the SDLT treatment of CoACSs investing in property so that SDLT does not arise on the transactions in units. This is subject to further consultation to resolve potential avoidance issues. Any legislation required will be in Finance Bill 2016.

This follows a consultation which was announced at Budget 2014. The response was published in December 2014.

Finance Bill 2016

Stamp duty land tax (SDLT): alternative property finance reliefs

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to amend the definition of a 'financial institution' that applies for the purposes of the alternative property finance reliefs to include persons authorised to provide home purchase plans. This will ensure that buyers who use a home purchase plan to finance their home purchase will pay the same level of SDLT as buyers who use a conventional mortgage. This will take effect from the date on which the Finance Bill 2015 receives Royal Assent. (TIIN)

Finance Bill 2015

Stamp duty land tax treatment (MDR) of shared ownership properties

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to extend the rules for multiple dwellings relief to include superior interests in residential property, such as shared ownership. This will apply where the transaction is part of a lease and leaseback arrangement, if acquired from a qualifying body such as a housing association. The change will take effect from the date on which Finance Bill 2015 receives Royal Assent. (TIIN)

Finance Bill 2015

Capital gains tax on disposals of residential property: non-residents and private residence relief

As announced at Autumn Statement 2013 and following consultation over the summer legislation will be introduced in Finance Bill 2015 to extend capital gains tax from 6 April 2015 to gains accruing to a non-resident person on the disposal of UK residential property. The legislation will also introduce a new rule to restrict access to private residence relief. A response to the consultation was published on 27 November 2014. (TIIN)

Finance Bill 2015

Capital gains tax: entrepreneurs' relief (ER) on goodwill

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to prevent claims to entrepreneurs' relief in respect of gains on business goodwill, where the goodwill has been disposed of to a limited company which is related to the claimant. The change will apply to disposals taking place on or after 3 December 2014. (TIIN)

Finance Bill 2015

Capital gains tax: entrepreneurs' relief (ER) and deferred gains

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to allow individuals to claim ER on gains which have been deferred under either the enterprise investment scheme (EIS) or the provisions for social investment tax relief (SITR). Gains on disposals which take place on or after 3 December 2014 will be eligible for ER after deferral, subject to the normal conditions in force when the original disposal took place. (TIIN)

Finance Bill 2015

Annual tax on enveloped dwellings (ATED): increase in charges

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to increase the annual ATED charges for properties valued at £2 million or more. The new charges will apply for the chargeable period 1 April 2015 to 31 March 2016. The new charges will be:

o           £23,350 for properties valued at more than £2 million but not more that £5 million

o           £54,450 for properties valued at more than £5 million but not more than £10 million

o           £109,050 for properties valued at more than £10 million but not more than £20 million, and

o           £218,200 for properties valued at more than £20 million

(TIIN)

Finance Bill 2015

Annual tax on enveloped dwellings: reducing the administrative burden

Annual Tax on Enveloped Dwellings: Following consultation, legislation will be introduced in Finance Bill 2015 to simplify the administration of ATED for businesses that hold properties eligible to a relief. The changes will amend the filing obligations, information requirements, and in some cases the time limits for delivering a return. These changes will come into effect on 1 April 2015, although for the chargeable period 1 April 2015 to 31 March 2016 the filing date will be extended to 1 October 2015. For subsequent years the normal filing date of 30 April will apply. There will be no change in relation to properties which have an ATED liability. Legislation is also introduced to amend the aggregation rule where different interests are held by connected persons in the same dwelling. Where one of the connected persons is an individual and the aggregate value of the interests is less than £2m, the company's interest must be more than £250,000 for aggregation to apply.

Finance Bill 2015

Capital gains tax on ATED-related gains

As announced at Budget 2014, legislation will be introduced to ensure the threshold amount above which disposals of residential property are subject to ATED-related capital gains tax is aligned and consistent with the changes to the ATED charging bands. The amount will change in two steps, on 6 April 2015 and 6 April 2016. (TIIN)

Finance Bill 2015

Inheritance Tax (IHT) and trusts

As announced at Autumn Statement, and following consultation the Government will not proceed with the introduction of a single settlements nil rate band.

Legislation will be introduced in Finance Bill 2015 to provide new rules about adding property to trusts on the same day to target IHT avoidance through the use of multiple trusts. The calculation of trust charges will be simplified by removing the requirement to include non-relevant property in the computation. Changes are also being made in certain areas of the relevant property trust legislation to close a gap and ease the effects of the legislation elsewhere. (TIIN)

Finance Bill 2015

IHT: Exemption for medals and other awards

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to extend the IHT exemption for awards for valour and gallantry to include medals and decorations awarded for service in the armed forces and emergency services. The extension will also apply to awards made by the Crown for public service or achievement in public life. The changes will have effect in relation to transfers of value made or treated as made on or after 3 December 2014. (TIIN)

Finance Bill 2015

IHT exemption for emergency service personnel

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to extend the IHT exemption for armed services personnel who die on active service to all emergency service personnel and humanitarian aid workers who die in the line of duty or whose death is hastened by injury incurred in the line of duty. The change will be effective where death occurred on or after 19 March 2014. (TIIN)

Finance Bill 2015

Inheritance tax: new digital service online

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to make minor changes to the provisions dealing with interest to make consequential amendments and to clarify the period from when interest is charged. This is part of the legislative changes to support the introduction of the new digital service announced at Autumn Statement 2013. (TIIN)

Finance Bill 2015

Improving the operation of the Construction Industry Scheme (CIS)

As announced at Autumn Statement and following a consultation after Budget 2014, the Government will legislate starting in April 2015 to implement a package of improvements to the CIS. These improvements will reduce administrative burdens on construction businesses enabling the scheme to be administered more efficiently. A summary of responses was published on 10 December 2014. (TIIN)

SI

Direct recovery of debts

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to enable tax and tax credit debts due to HM Revenue and Customs to be removed from debtors' accounts in credit. This follows announcement at Budget 2014 and consultation over the summer.

Every debtor will receive a face-to-face visit from HMRC agents before their debts are considered for recovery through DRD. In cases where debtors have received this visit, have not been identified as vulnerable, have sufficient money in their bank account and have still not arranged to settle their debts, HMRC may require banks, building societies and other deposit takers to place a hold of up to 30 days on the debt due to HMRC. Removal of funds from accounts will be limited to credit balances and safeguards will be put in place to ensure that a minimum credit balance of at least £5000 remains in the account after the debt has been held. There will be rights of appeal to the County Court against the exercise of this power on the grounds that the amount has already been paid, the conditions for issuing a hold notice were not met, the hold notice is causing hardship and to protect third parties in the case of joint accounts.

The Government intends to legislate this measure in a Finance Bill in 2015, during the next Parliament. (TIIN)

Finance (No 2) Bill 2015

Strengthening civil deterrents

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to provide enhanced civil penalties for offshore tax evasion. This follows the consultation over the summer.

This will amend the existing offshore penalties regime to:

o           include Inheritance Tax

o           apply to domestic offences where the proceeds of non-compliance are hidden offshore

o           update the territory classification system to reflect the jurisdictions that adopt the new automatic exchange of information standard under the Common Reporting Standard ('CRS'); and

o           include a new aggravated penalty of a further 50% for circumventing the CRS by moving hidden funds to jurisdictions not committed to it.

The changes will come into effect from April 2016, except for the aggravated penalty which will come into effect following Royal Assent. A response to the consultation was published on 10 December 2014. (TIIN)

Finance Bill 2015

Enhancing financial incentives for offshore intelligence

As announced at Autumn Statement, HMRC will review the incentives it offers for information on offshore tax evaders, in particular those who seek to remain outside the reach of international efforts to achieve tax transparency. HMRC will be consulting with law enforcement agencies and other interested stakeholders on how best to achieve this. HMRC has made it clear that it is willing and able to pay rewards for information which helps it uncover offshore evasion.

Finance Bill 2015

Country-by-country reporting

Following the publication of the OECD (2014) Guidance on Transfer Pricing Documentation and country-by-country Reporting on16 September 2014, legislation will be introduced to enable the implementation in the UK of the OECD model for country-by-country reporting. (TIIN)

Finance Bill 2015

Disclosure of Tax Avoidance Schemes (DOTAS) regime changes

As announced in the Autumn Statement, legislation will be introduced in Finance Bill 2015 to strengthen the DOTAS regime. The legislation will strengthen aspects of DOTAS, including the 'hallmarks' to ensure avoidance that is being marketed and used now must be disclosed to HMRC. It will strengthen the powers that enable HMRC to identify and pursue those who are required to disclose but do not and to obtain information about employees who are party to avoidance schemes. It will also allow HMRC to publish information about promoters and schemes that are notified under the strengthened regime. (TIIN)

Finance Bill 2015

Promoters of tax avoidance schemes

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to allow HMRC to issue Conduct Notices to a broader range of connected persons under the common control of a promoter of tax avoidance schemes. The new provisions will provide that the 3 year time limit for issuing notices to promoters who have failed to disclose avoidance schemes to HMRC applies from the date when the failure comes to the attention of HMRC, introduce a new threshold condition for failing to comply with NICs disclosure requirements and ensure that the threshold conditions take account of decisions by independent bodies in matters of all relevant forms of professional misconduct. (TIIN)

Finance Bill 2015

Penalties for General anti-Abuse Rule (GAAR) cases

As announced at Autumn Statement, the Government will consult on whether and how to introduce penalties for tax compliance cases where the GAAR applies. The consultation will take place early in 2015 as part of the Government's wider plans to develop ways of responding to those who engage in abusive arrangements.

Serial avoiders

As announced at Autumn Statement, the Government will consult early in 2015 on potential action that could be taken to impose additional financial costs, compliance and reporting requirements on repeat users of known avoidance schemes. The Government will seek views on whether publishing the names of individuals who have engaged in multiple tax avoidance schemes could contribute to deterrence in this area.

Employment intermediaries: penalties

 As announced at Autumn Statement, legislation will be introduced in Finance Bill 2015 to amend legislation introduced in Finance Act 2014 to prevent the avoidance of employment taxes by UK agencies engaging UK workers via non-UK agencies, intermediaries facilitating false self-employment and the Employment Intermediaries Information Quarterly Return.

 It allows HMRC to make penalties for a failure to furnish any information, or produce any document or record required to be submitted by a specified employment intermediary in accordance with regulations under s716B ITEPA 2003.

Finance Bill 2015

HMRC Tax Enquiries: closure rules

 As announced at Autumn Statement, the Government will consult on a proposal to introduce a new power, enabling HMRC to achieve early resolution and closure of one or more aspects of a tax enquiry, whilst leaving other aspects of the tax enquiry open. HMRC would target the power at cases or issues involving high tax risk, including those which involve tax avoidance. HMRC expects earlier payment of tax in respect of the particular aspects addressed by HMRC.

Bolstering Large Business Risk Working

As announced at Autumn Statement, additional resources will be introduced from April 2015 within HMRC to create a flexible, national team further targeting Large Businesses who avoid tax.

Office of Tax Simplification (OTS) report on the competitiveness of UK tax administration

As announced at Autumn Statement the Government has accepted or will further consider 51 of the 58 recommendations made by the OTS. The Government has commenced work on many of these, with details to be published in due course.

Tax Credits: reducing payments to prevent overpayments following a change in entitlement in year

As announced at Autumn Statement, the Government will prevent the build-up of tax credit debt by reducing payments in-year where, due to a change in circumstances, a claimant will be on track for an overpayment. This extends the scope of the announcement at Autumn Statement 2013 that tax credits payments will be stopped in-year where, due to a change in circumstance, a claimant has already received their full annual entitlement. This will prevent claimants building up unnecessary overpayments that must be repaid at a later date. These changes will take effect from April 2015.

Access to benefits

As announced at Autumn Statement the eligibility conditions will be tightened for those using self-employment to meet the qualifying remunerative work conditions for eligibility to Working Tax Credit (WTC), to prevent abuse of the system. These include new conditions that require the claimant to register their self-employment for self-assessment and provide HMRC with their Unique Tax Reference - along with a requirement that the self-employment is genuine and effective and not marginal or ancillary. Those claimants who declare income less than the equivalent of working 24 hours a week at the National Minimum Wage will be required to provide evidence to HMRC that the work being undertaken is genuine and effective. This will prevent bogus self-employment and abuse of the tax credits system, while allowing HMRC to continue to support those who are genuinely self-employed.

Extending death relaxation to annuities

As announced at Autumn Statement, from April 2015 beneficiaries of individuals who die under the age of 75 with a joint life or guaranteed term annuity, will be able to receive any future payments from such policies tax free where no payments had been made from the policy to the beneficiary before 6 April 2015. The tax rules will also be changed to allow joint life annuities to be passed to any beneficiary.

Taxation of Pensions Bill

Taxation of pensions Bill

An updated Tax Information and Impact Note (TIIN) in connection with the new flexibilities for accessing money purchase pension savings from April 2015 has been published. The TIIN has been updated to reflect revised Exchequer impacts that result from the changes set out in the Taxation of Pensions Bill. (TIIN)