UK Autumn Budget 2017 – miscellanea and tidbits

Dec 04, 2017

We finish off our coverage of Autumn Budget 2017 with a round-up of various other measures announced.

  • Following the review of the gift aid donor benefit rules, the current three monetary thresholds will be reduced to two, while all existing extra-statutory concessions will be legislated. Changes will come into effect from April 2019.
  • The ISA annual subscription limit for 2018-19 is unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2018-19 will increase to £4,260.
  • The lifetime allowance for pension savings will increase to £1,030,000 for 2018-19
  • From 6 April 2018, employees on maternity and parental leave will be able to take up to a 12 month pause from saving into their Save As You Earn employee share scheme, increased from the current 6 months
  • From April 2019, tax relief for employer premiums paid into life assurance products/certain overseas pension schemes will be modernised to cover policies when an employee nominates an individual/registered charity to be their beneficiary.
  • The government will legislate to exempt certain transfers of shares and land from stamp taxes when resolving failing financial institutions.
  • The government will not reintroduce the Stamp Duty/Stamp Duty Reserve Tax 1.5 percent charge on the issue of shares (and transfers integral to capital raising) into overseas clearance services and depositary receipt systems following the UK’s exit from the EU.
  • The fuel benefit and van benefit charges will both increase by RPI from 6 April 2018.
  • Short-haul APD rates for 2019-20 will remain frozen as they have been since 2012. The long-haul rate for economy passengers will be frozen at the 2018-19 rates while the rates for premium economy, business and first class will increase by £16 and for those travelling by private jet by £47.
  • The list of designated energy-saving technologies qualifying for an ECA, which support investment in energy-saving plant or machinery, will be updated via Finance Bill 2017-18.
  • The government will extend the ECA first year tax credit scheme until the end of this Parliament and the credit rate will be set at two-thirds the rate of corporation tax.
  • Businesses currently benefit from postponed accounting for VAT when importing goods from the EU. The government will take this into account when considering potential changes following the EU exit and will look at options to mitigate any cash flow impacts.
  • The government will consult on plans to legislate in Finance Bill 2018-19 to ensure that when customers pay with vouchers, businesses account for the same amount of VAT as when other means of payment are used.
  • The government will legislate in Finance Bill 2017-18 to extend HMRC’s powers to hold online marketplaces jointly and severally liable for any VAT that a non-UK business selling goods on their platforms fails to account for, where the business was not registered for VAT in the UK and that online marketplace knew or should have known that the business should be registered for VAT in the UK. This will come into force on Royal Assent.
  • The government is currently considering a split payment model for VAT. Following the call for evidence launched at Spring Budget 2017, the government will publish a response this month.
  • The government will reform the penalty system for late or missing tax returns, adopting a new points-based approach.  It will also consult on whether to simplify and harmonise penalties and interest due on late payments and repayments. Final decisions on both measures will be taken following this latter consultation.
  • HMRC will “use new technology” to recover additional Self-Assessment debts in closer to real-time by adjusting the tax codes of individuals with Pay As You Earn income. These changes will take effect from 6 April 2019.
  • The government will expand existing security deposit legislation to corporation tax and construction industry scheme deductions. These changes will be legislated for in Finance Bill 2018-19 and take effect from 6 April 2019. The government will consult on the most effective means of introducing this change. 

The government announced it is also investing a further £155 million in additional resources and new technology for HMRC. This investment is forecast to bring in £2.3 billion of additional tax revenues by allowing HMRC to:

  • transform the approach to tackling the hidden economy through new technology;
  • further tackle those who are engaging in marketed tax avoidance schemes;
  • enhance efforts to tackle the enablers of tax fraud and hold intermediaries accountable for the services they provide using the Corporate Criminal Offence;
  • increase the ability to tackle non-compliance among mid-size businesses and wealthy individuals; and
  • recover greater amounts of tax debt including through a new taskforce to specifically tackle tax debts more than 9 months old

Interestingly this investment makes no mention of the additional resources HMRC will no doubt need in the area of customs duties when the UK leaves the EU in just under 16 months.