Spring Statement – 13 March
The Chancellor has announced that the Spring Statement will be on Wednesday 13 March.
Finance Act has Royal Assent
Finance Act 2019 has officially received Royal Assent, and may be viewed here.
Other Bill documents (such as explanatory notes) may be found here.
Making Tax Digital (MTD) update(s)
1. VAT Notice 700/22: Making Tax Digital for VAT has been updated:
- The original version said that a business would have to adopt MTD for VAT if it had ever exceeded the VAT registration threshold. This has now been changed to say that a business will have to adopt MTD only if its taxable turnover exceeds the VAT registration threshold from 1 April 2019. Once within MTD, however, a business will have to follow the rules even if its turnover later falls below the threshold (unless it de-registers or meets other exemption criteria).
- The soft-landing period (which relaxes the requirement to have wholly digital integration between a business’ software packages) will also last a full year for those businesses that have had MTD deferred until October 2019.
2. Separately, the government has responded to the House of Lords’ Report on MTD for VAT, which made a number of recommendations to support taxpayers through the transition and beyond.
The government’s response is broadly as one might expect, and no significant changes have come to light.
Self-assessment late filing penalties may be appealed
The Low Incomes Tax Reform Group (LITRG) is reminding taxpayers that late filing penalties may be appealed where there is a ‘reasonable excuse’, which could be one or a number of circumstances that conspired to prevent timeous filing. Of course, once those issues have been resolved, the taxpayer must then file within a reasonable period. Examples given include:
- · problems with using the online filing facility, such as system failure;
- · unforeseen pressures of work – a sudden unexpected and significant increase in workload might be a reasonable excuse;
- · an agent’s being unable to file because of unforeseen circumstances – not normally a reasonable excuse for the taxpayer, but the example given is if the agent’s partner had died;
- · physical or mental disabilities.
Agents should be familiar with ‘reasonable excuse’, and also with HMRC’s narrow interpretation of the concept – which has frequently been criticised at tribunal.
For more information on reasonable excuse, click here.
Loan charge looms – some respite for lower-paid workers?
LITRG has published a further article on the charge on ‘disguised remuneration loans’ outstanding at April 2019 (ITEPA 2003, Pt 7A).
Amongst other things, it notes that HMRC recently announced that those subject to the Loan Charge but with annual incomes currently under £30,000 could agree up to 7 years to pay the Loan Charge (the previous arrangement was to provide those with incomes up to £50,000 a year, with up to 5 years to pay).
HMRC has also confirmed in its recently updated guidance that there is flexibility to go arrange longer repayment terms for those with higher incomes, in the right circumstances:
‘There are no defined minimum or maximum time periods for payment arrangements but we will need to ask you for more information. We will:
- · take into account any changes in your circumstances and discuss options to make sure we manage your case in the best way
- · always take a realistic look at your income, assets and essential outgoings, alongside what you owe and any other debts
- · always consider how much you’re able to pay, and over what period
- · expect you to pay the outstanding amount in the fastest possible time.’
Readers will be aware from the January issue of Month in a Minute that there are concerns in government and elsewhere that the loan charge may ‘go too far’, but it seems unlikely that HMRC will be prevented from implementing the charge on the due date.
For more information on the disguised remuneration loan charge, click here.
TRUSTS, ESTATES AND INHERITANCE TAX
New banded probate fees approved by Commons committee
The Society of Trust and Estate Practitioners (STEP) has reported that the new, significantly higher probate fee banding structure has been approved by Commons committee. As we reported in the December issue of Month in a Minute, STEP (amongst others) was opposed to the introduction of the new rates, arguing that it bore no relation to the cost of processing the application, and looked very like a tax and should therefore be subjected to full Parliamentary scrutiny, rather than being brought in through a statutory instrument.
Deferment of Class 1 NICs for 2019/20 – new form CA72A
HMRC has updated its Form CA72A for 2019/20, so that those expecting to pay primary Class 1 National Insurance contributions on earnings of at least:
- £962 each week, (£4,167 each month) throughout the whole tax year in one job; or
- £1,128 each week, (£4,886 each month) throughout the whole tax year in two or more jobs
can ask to defer paying the full rate on other earnings under PAYE.
For more information on Class 1 NICs deferment, click here.This article is part of a longer update available on our online Tax services. Click here for more information.