Accountancy, Accounting standards, Budget stuff, Business Services, Business Tax, Capital Gains Tax, Compliance, Personal tax, Tax Relief, Taxation

Tax policy changes: What to expect in this year’s Summer Finance Bill

By RJP LLP

Following the delays caused by the general election, and with the House of Commons currently in summer recess, the ‘’summer’’ finance bill will not be published until later in the autumn.

The main measures everyone is waiting for in this bill are those which were previously announced but were subsequently dropped from the pre-election finance bill, especially those which were due to take effect from April 2017, the ‘dropping’ of which has left people in limbo.

In this bill, we can expect over 30 detailed measures from HMRC, covering a wide range of areas. Some will have a greater impact than others. For instance, two that are most likely to cause a stir for large companies are new restrictions to tax relief available on loan interest and financing costs, plus the changes to the treatment of corporate losses. These are likely to mainly affect larger companies with profits across a group exceeding £5m, or those facing interest charges in excess of £2m.

Smaller companies and individuals, including those who are non-UK domiciled, will be particularly interested in the following changes:

Making Tax Digital

The original Making Tax Digital (MTD) proposals, under which all taxpayers would be required to calculate their tax liabilities quarterly and pay HMRC through a single digital account have been amended and simplified significantly. It is now proposed that only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, and these will only be for VAT purposes. The start date for those impacted is April 2019.

Originally, MTD was due to come into force for Income Tax and Class 4 NIC purposes from April 2018, so the amendment VAT payments only is a significant simplification.

All other unaffected businesses (anyone with a turnover below the current VAT threshold of £85,000) will not be asked to keep digital records, or to update HMRC quarterly for any other taxes, until at least 2020. Before this time, businesses wishing to follow the MTD proposals can opt to do so if they wish. This relaxation is a very welcome move and means that the proposals can be fully tested by business owners before they are implemented in full.

Relaxation to SSE legislation

The proposed relaxation to the substantial shareholding exemption (SSE) legislation, again previously dropped, is expected to be included. This was a simplification originally proposed by Phillip Hammond in his first budget as Chancellor and then placed on hold until after the June Election. It is now back on the agenda and its introduction will mean that less stringent criteria are required to be met by holding companies in order to qualifying for relief on the sale of shares in a trading subsidiary.

SSE is a very valuable relief but there are strict qualifying criteria. Read about qualifying for SSE relief and the implications of their relaxation in our earlier blog.

Final chance to repay outstanding EBT loans

New anti avoidance rules will impact the treatment of outstanding loans from employee benefit trusts (classified as disguised remuneration schemes by HMRC). This has been on the agenda for some time, following the closure of a final EBT amnesty announced by George Osborne, which gave anyone with an EBT until 30^th November 2016 to settle their affairs in full in return for a reduced penalty.

The issue of EBTs has been topical since Rangers Football Club lost its appeal against HMRC’s ruling that its ‘side payments’ to players, made through a complex structure of EBTs, were actually disguised income and fully taxable. Currently, all companies that use this form of remuneration to pay employees are being urged to ensure that any outstanding loans are repaid in full before 5^th April 2019.

Any loans that remain outstanding after this time will be subject to a PAYE charge on that date on the full value of the loan, regardless of when it was taken out. It will also be possible for HMRC to collect the PAYE on this liability from the employee rather than the company. Learn more about the implications of this in our earlier blog on the risk of using EBTs.

Changes to tax treatment of non-UK domiciled individuals

One of the most complex changes coming into effect relates to the tax treatment of people who are non-domiciled in the UK. There are many technical aspects to these changes and our advice to anyone who is non-domiciled in the UK, is to seek advice from their tax adviser and ensure that their tax affairs have been arranged to comply with the new rules.

If you want advice on how the finance bill legislation may affect you, please email Lesley Stalker at partners@rjp.co.uk.

How to get onboard with RJP

Talk to us

Have a free initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.

Hassle-free migration

Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.

A pathway to growth

Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.

Chancellor unveils business tax roadmap plan

Business Services, Business Tax

IHT forms get long overdue update

Personal tax

RTI reporting changes for business payroll to be postponed

Business Services, Business Tax

Here’s what our clients have to say

Hear directly from our clients about how RJP's personal, straightforward approach has made all the difference in their business and personal success.

"I just wanted to drop you a short note to say how grateful I am for the support that RJP has provided over the past 4 weeks while our Financial Controller was away. I struggle to comprehend how much work your staff get through during their weekly visits and they are always a pleasure to have around the office."

"I wanted to write and express our gratitude for your help and hard work in getting Probate through and settling all the taxes. I am so pleased that we selected RJP, as your professional help and updates throughout this process have been invaluable. If at any time in the future Probate assessment may be needed, you will be our first port of call. Once again, many thanks to the whole team."

"I would like to take this opportunity to thank you very much for the amazing job you have done navigating us through this whole process. My family and I also really appreciate the care and compassion demonstrated by you and your team in every dealing. Our thanks to everyone."

"Just a quick e-mail from me to thank you for achieving the target for producing the draft accounts – it is very much appreciated and gives a first class impression of your firm. Many thanks."

"RJP provide our company with a complete service which takes the stress and strain away from the day to day running of our accounts! Their understanding of our business and their patience and advice is invaluable."

Get the latest tax tips to your inbox every month

FAQs

At RJP, we understand that keeping a finger on the pulse of your business's health is crucial. That's why we offer management reporting services—think of them as a regular health check for your company. These insights show you the real-time performance of your business, helping you make informed decisions to nurture and grow your enterprise.

We love seeing your business flourish! Growth and improvement are at the heart of our practical advice. From the ins and outs of everyday operations to big-picture strategic moves, we're here to offer clear, actionable steps that can propel your business forward.

We know dealing with the issue of compliance and auditing can be less than thrilling. That's exactly why we're here—to handle the complex stuff so you don't have to. We offer comprehensive compliance services, ensuring everything is up-to-date without you having to wade through a sea of regulations.

Absolutely! There's a world of opportunity out there to support your business financially, and we're well-equipped to be your guide. We can help you understand and access HMRC’s tax relief schemes that are relevant to you and your business, making sure you're not missing out on any potential benefits.

When you need us, we're just a call or an email away—no question is too small or too large. We're known for our quick responses and our fixed fees mean you can reach out without worrying about unexpected costs. Plus, we always keep things simple and straight to the point. We're not just your accountants; we're part of your team, ready to support both your business and personal needs.