UK Autumn Budget 2018 – miscellaneous

Nov 12, 2018

Miscellaneous measures featured Brexit, car benefit in kind changes, insolvency and some matters impacting on the charity sector.

EU exit and taxation

A power will be implemented to allow the government “to make small, essential changes to UK tax law to maintain the effect of tax legislation if the UK leaves the EU without a deal.”

According to the Budget documents, the changes made under this power will maintain current operation of the tax law in essential areas, including changes in line with no deal legislation in other parts of the law.

Company vehicles

From 6 April 2019, fuel benefit charges will increase in line with RPI and the van benefit charge will increase in line with CPI.

Charities

From April 2019, the government will introduce a package of measures to reduce administrative burdens on charities. These will:

  • increase the upper limit for trading that charities can carry out without incurring a tax liability from £5,000 to £8,000 where turnover is under £20,000, and from £50,000 to £80,000 where turnover exceeds £200,000;
  • allow charity shops using the Retail Gift Aid Scheme to send letters to donors every three years when their goods raise less than £20 a year, rather than every tax year; and
  • increase the individual donation limit under the Gift Aid Small Donations Scheme to £30, which applies to small collections where it is impractical to obtain a Gift Aid declaration.

Insolvency

When a company goes insolvent, the order of distribution for assets from that company is set by law. Currently, many creditors other than HMRC have a higher priority claim on the assets of an insolvent company – even for taxes paid by employees and customers that the business holds temporarily, in a fiduciary capacity, before passing them onto the government

From 6 April 2020, when a business enters insolvency, certain taxes will go to fund public services rather than being distributed to other creditors.

This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers (VAT, PAYE Income Tax, employee NICs, and Construction Industry Scheme deductions). The rules will remain unchanged for taxes owed by businesses themselves such as corporation tax and employer NICs.