An overview of the Chancellor’s future plans. Not the Budget. And not a great deal about tax, other than a proposal to bring in a tax on disposable plastics. This follows the trend of the plastic-bag charge already in place.
No immediate changes to the tax rates and rules already announced in the autumn 2017 Budget: these are already in legislation passed back in November.
Tax tables will go out early April to clients, showing current tax rates and allowances.
We are into the new Budget calendar. Instead of a spring Budget, we now have an Autumn Budget with a spring statement from next year to pre-announce some changes. The revised calendar is potentially good news, with more notice of changes for the next tax year going forward. Though this does depend on whether the Government sticks to what has been announced. The backtracking on Class 4 NICs (going up/going back down) and the recent Class 2 NIC change (it was about to go, now it’s back in for at least another year) suggests there is still a rather whimsical selectiveness as to whether measures announced are then followed through.
Today it is expected that the Chancellor will focus mainly on housing issues. I shall add details later today on key points relating to tax – see BUDGET NEWS above.
A new and longer-term timetable for the Making Tax Digital project has been announced today.
This is excellent news and seems a much more realistic timescale. Currently, 2019 will signal the first move into the digital regime, but only for businesses trading about the VAT threshold (£85,000 income per year). Requirements for others to join the regime will be later, the record-keeping requirements are being relaxed, and some aspects of MTD will be voluntary for the smallest businesses.
There is a link to the announcement on the right under Tax Links in MTD latest.
The Finance Act rushed in before Parliament dissolved ready for the snap election was very, very short.
It had the bare minimum of information needed to keep tax running. By law, if Parliament closes with no Finance Act in place, all power to tax is lost.
There was nothing on Making Tax Digital. Many other pre-announced changes, eg to non-domicile status, were also omitted.
This does not mean that MTD is being abandoned! It may mean that the start dates are pushed back again. It also gives a welcome opportunity for further consideration of responses to consultation.
Over summer there is likely to be a Finance Bill, probably soon after the election, whatever the outcome. I would expect this to include much of what was omitted from the current FA, with the benefit of longer for drafting.
The rise in national insurance contributions for the self employed has been abandoned. I don’t find sudden u-turns impressive, as anything this swift suggests more consultation was needed before deciding on the now-scrapped increase. However, this is good news for many of my self-employed clients who would have been hit by this measure.
Class 2 NI is continuing to cause issues – clients are receiving recalculated tax with these left out when they were in fact due. If you receive any recalculation or any letter asking for a payment of Class 2, please let me know.
The first of two budgets for this year.
The timetable shifts after this to autumn budgets. This is potentially useful, as future changes to tax will be announced earlier giving more time for planning and preparation. With the uncertainty that EU negotiations will bring later this year, it also gives the chance to respond quickly without being seen to declare an emergency budget.
Key points most likely to affect my clients are summarised here in the BUDGET NEWS page, and please see the link on the right under TAX LINKS to allowances and rates. A key development is rises in national insurance rates for the self employed (which at the time of writing have not yet been updated on HMRC’s website). There was a ‘tax lock’ which was supposed to guarantee no rises of this sort, however this lock would appear to have been picked.
Please look out also for details on Making Tax Digital. This is the new reporting system set to replace the current tax returns. Instead, five submissions a year – four quarterly ‘updates’ plus an annual adjustment – will go to HMRC. Coming for all businesses and landlords: from April 2018 for those above the VAT threshold, April 2019 for other businesses.
https://www.gov.uk/government/news/7-things-you-need-to-know-about-the-new-budget-timetable