George Osborne has delivered his latest Autumn Statement. Here are the headlines:
Making Tax Digital
- By 2020, HMRC will require most businesses, self-employed people and landlords to keep track of their tax affairs digitally and to update HMRC at least quarterly via their digital tax account. This will not apply to individuals in employment or pensioners, unless they have secondary incomes in excess of £10,000 per year. Access to digital tax accounts is planned by 2016/17.
- HMRC is to consult on simplifying the payment of taxes with a view to aligning the payment dates closer to the point when profits arise.
- A payment on account of any Capital Gains Tax due on the disposal of a residential property will be required to be made within 30 days of the completion of the disposal. This requirement will be introduced from April 2019 to ensure HMRC’s digital services are ready to handle the change.
- From 1 April 2016 higher rates of Stamp Duty will be charged on purchases of additional residential properties with a value more than £40,000, such as buy to let properties and second homes. The higher rates will be 3 percentage points above the current Stamp Duty rates.
- A consultation will take place in 2016 to consider changes to the Stamp Duty filing and payment process, including a reduction in the filing and payment window from 30 days to 14 days. The changes will come into effect in 2017/18.
Avoidance and Evasion
- New civil penalties will be introduced in the Finance Bill 2016 focused on those people who enable or engage in deliberate offshore tax evasion.
- A consultation will examine an additional requirement for individuals to correct any past offshore non-compliance, with new penalties charged for a failure to do so.
- New measures will be introduced to tackle those people who persistently enter into tax avoidance schemes that are defeated by HMRC. The measures include a special reporting requirement, a surcharge on those whose latest tax return is inaccurate due to use of a defeated scheme and the names of such avoiders being published.
- From 6 April 2016 tax relief will be restricted on travel and subsistence expenditure for workers engaged through an employment intermediary, such as an umbrella company or a personal service company.
- The government will take further steps to reduce spending on agency and contractor services by at least 20% by 2019/20. This includes government spending across advertising, marketing, consultancy and IT.
Author: Guy Smith, Tax Investigations Manager