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Raft of SIs and draft regulations published

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The Taxation (International and Other Provisions) Act 2010 (Amendment to Section 371RE) (Controlled Foreign Companies) Regulations, SI 2014/3237, come into force on 31 December 2014. These amending regulations update references to ‘parent’ and ‘subsidiary’ for the purposes of determining whether a foreign company is controlled by a UK person, to reflect the definitions given in new Financial Reporting Standard 102, which replaces Financial Reporting Standard 2 in relation to accounting periods beginning on or after 1 January 2015.

The Income Tax (Recommended Medical Treatment) Regulations, SI 2014/3227, have been laid before Parliament. These regulations set out the additional conditions that must be met for an employer to qualify for the new tax exemption in respect of ‘recommended medical treatment’ provided to an employee from 1 January 2015. These conditions include the individual employee having been assessed as unfit for work for at least 28 consecutive days and not returning to work before a recommendation for medical treatment has been made. Separate regulations provide for a similar NICs disregard.

The Finance Act 2014, Section 12 (Appointed Day) Order, SI 2014/3226, has been made; and appoints 1 January 2015 as the commencement date for the new income tax exemption where an employer meets the cost of recommended medical treatment provided to an employee, subject to an annual cap of £500.

The Social Security (Contributions) (Amendment No 6) Regulations, SI 2014/3228, have been laid before Parliament. These regulations provide for an NIC disregard to mirror the new income tax exemption for employers in respect of ‘recommended medical treatment’ provided to an employee with effect from 1 January 2015.

The Finance Act 2009, Schedules 55 and 56 and Sections 101 and 102 (Stamp Duty Reserve Tax) (Appointed Days, Consequential and Transitional Provision) Order, SI 2014/3269, has been laid before Parliament and brings into force for stamp duty reserve tax the harmonised interest and penalty regimes for late filing of returns and late payment of tax, introduced by FA 2009, with effect from 1 January 2015.

The Social Security Contributions (Limited Liability Partnership) Regulations, SI 2014/3159, came into force on 5 December 2014, and give effect to provisions in the National Insurance Contributions Act 2014 treating salaried members of limited liability partnerships as employees subject to class 1 and class 1A NIC where three specified conditions are met, with retrospective effect from 6 April 2014. The regulations take priority over the intermediaries (IR35) legislation so that a double charge will not arise. They also ensure that salaried members are eligible to receive statutory payments. Corresponding income tax legislation is contained in FA 2014. These regulations were published in draft for comment in April and October 2014.

The CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) (Amendment) (No 2) Regulations, SI 2014/3262, have been laid before Parliament. These amending regulations, coming into force on 1 April 2015, set the price of allowances for years following 2015 used in an emissions trading scheme at £16.90. The price of allowances in 2015 is unchanged at £16.40. The regulations also provide that payments may not be made using a credit card.

The Social Security Class 3A Contributions (Units of Additional Pension) Regulations, SI 2014/3240, have been made. These regulations set the amount of the new voluntary class 3A NIC payable to obtain one unit of additional pension, based on age, up to a maximum of 25 units. People who reach state pension age before 6 April 2016 will be able to pay class 3A NIC between October 2015 and April 2017 to top up their additional state pension. The regulations come into force in Great Britain on 12 October 2015 and in Northern Ireland from a date to be appointed.

The Income Tax (Indexation) Order, SI 2014/3273, has been made. This order sets out the new amount of the blind person’s allowance and the minimum and maximum amounts of married couple’s allowance for the tax year 2015/16. It also increases the income limits for married couple’s allowance and the personal allowance for individuals born before 5th April 1938. These amounts are increased in line with the consumer prices index (CPI). The order does not make provision for income tax rate limits and personal allowances for individuals born after 5th April 1938, which are now set independently of the CPI.

The Draft Finance Act 2004 (Registered Pension Schemes and Annual Allowance Charge) (Amendment) Order, SI 2015/Draft, has been published. These revised draft regulations make changes to ensure the annual allowance legislation works as intended. Amendments include: removing the need for pension scheme administrators to test deferred benefit rights against the annual allowance; preventing unintended pension input amounts arising on individuals where transfers occur; and ensuring that an annual allowance charge paid through the ‘scheme pays’ facility operates fairly. HMRC has also published a revised version of draft changes to its registered pension schemes manual. Initial drafts were published for comment in July 2014.

The Draft Finance Act 2014 (High Risk Promoters Prescribed Information) Regulations, SI 2015/draft, have been published. This is the third and final set of regulations needed to support the Promoters of Tax Avoidance Schemes (POTAS) legislation. They:

  • set out when a monitored promoter must explain in publications and correspondence that they’re monitored under the POTAS legislation;
  • require that any information published on the internet has to set out the promoter’s monitored status clearly and prominently;
  • set out the information that clients of a monitored promoter must provide to HMRC about their use of the promoter’s products, and by when, where that information isn’t provided on an self-assessment tax return;
  • set out what information must be provided to HMRC by a monitored promoter or intermediary about: avoidance products and clients which have been notified to HMRC; avoidance products and clients which haven’t previously been notified to HMRC; and clients where HMRC has made an enquiry to establish whether the client has been notified to HMRC; and
  • set out when copy documents, rather than originals, may be provided to HMRC.

These draft regulations will have effect once approved by the House of Commons. Any comments should be directed by email by Tuesday 27 January 2015.