General

The Chancellor, Philip Hammond has announced that the government will waive the VAT equivalent on the sales of this year’s X-Factor Christmas Charity single. All proceeds from the sale of the single are going to two children’s charities; Together for Short Lives and Shooting Star Chase Children’s Hospice.

Both charities provide support for children with life-limiting illnesses and their families. The donation will be the equivalent of the sum of the VAT receipts collected on sales of the single the winner of the reality show.

The Chancellor commented that:

‘Sales from this year’s X Factor charity single will help children with life-limiting diseases and their families. We will donate the VAT paid on the sales, ensuring more people can benefit from this crucial funding. The single goes a huge way in raising awareness of valuable causes and the charities behind them and that’s why the government has supported the X factor Christmas single with donations worth more than £300,000 over the last eight years. From the whole government, we wish everyone in the final the best of luck.’

The government has previously waived the VAT on previous X-Factor singles as well as for the 2016 Jo Cox Foundation single, 2015 Save the Children single, 2011’s Military Wives Choir single and the 2010 Haiti earthquake appeal single.

The Gigabit Broadband Voucher Scheme was launched in March this year to help small businesses and local communities connect and gain access to full fibre superfast broadband speeds. The vouchers can be used by small businesses and the local communities surrounding them. The scheme is part of a series of Government initiatives to build nationwide full fibre broadband coverage by 2033.

The Government invested £67 million in the scheme that was expected to run until March 2021. However, the high take-up of the vouchers, has meant that the scheme is likely to close by March 2020 or even earlier if the current raft of applications continues. To date, demand for the scheme has been strongest in the South West, followed by the South East, Yorkshire and the North West.

Any businesses interested in benefitting from the scheme, is therefore urged to make use of the £2,500 voucher for gigabit broadband speeds before the scheme closes due to high demand. The scheme is mainly aimed at small businesses but is also available to residents as part of a group project with businesses.

The maximum voucher available to businesses has been reduced from £3,000 to encourage neighbouring businesses to ‘pool’ their vouchers as a group project, which would enable the scheme to have wider reach. Local residents can also benefit from the scheme with a voucher worth £500 as part of a group project. The scheme is available through accredited suppliers who will claim the vouchers on behalf of their customers.

To mark the occasion of Talk Money Week, HMRC has published a news release trumpeting five tax saving opportunities. Whilst these tax saving opportunities are routinely available to many taxpayers, it is unusual to see them all listed together. HMRC’s list serves as a useful reminder of some simple measures taxpayers can take to legitimately reduce the amount of tax they pay.

The tax saving opportunities highlighted by HMRC are as follows:

1. The Marriage Allowance is available to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax or doesn’t pay tax above the basic rate threshold for Income Tax. Couples that have not yet claimed the allowance can backdate their claim as far back as 6 April 2015 if they meet the eligibility requirements. This could result in a saving of up to £662 for 2015-16, 2016-17 and 2017-18 and a further £238 for this year. Couples have up to four years to claim backdated annual allowances.
2. The Help to Save scheme allows qualifying working taxpayers to save up to £50 a month for two years and receive a 50% government bonus. This could see those on low incomes receive a bonus of up to £1,200 on maximum savings of £2,400 for 4 years from the date the account is opened. There are no limits on how the money used can be spent but it is hoped that the money will be saved for urgent costs
3. The Tax-Free Childcare Scheme (TFCS) helps support working families with their childcare costs. For every 80p in the £1 contributed by parents, an additional 20p or 20% is funded by Government up to a maximum total of £10,000 per child per year. This gives parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the age of 17) in childcare costs.
4. Employees who use their own money to pay for uniforms, work clothing, tools, business travel and professional fees for work can claim tax relief for qualifying costs. ACheck if You Can Claim tool is available on GOV.UK.
5. First time buyers of a residential property can claim relief from Stamp Duty Land Tax (SDLT). The First-Time Buyers Relief introduced on 22 November 2017 means that no SDLT is payable by first-time buyers making a purchase of up to £300,000. The relief is also extended to the first £300,000 of the purchase price on properties valued at up to £500,000.

As expected, the government published Finance (No.3) Bill on Wednesday, 7 November 2018. The Bill is so named as it is the third Finance Bill in the current special two-year session of Parliament. The Bill contains the legislation for many of the tax measures announced by the Government at Autumn Budget 2017 some of which have since been the subject of further consultation. The Bill also includes other measures that were first announced in the recent autumn Budget on 29 October 2018.

The Bill extends to some 315 pages whilst the accompanying explanatory notes add another 266 pages. The Bill is colloquially known as Finance Bill 2018-19, and will become Finance Act 2019 after Royal Assent is received which is expected in March 2019 before the Brexit deadline.

Some of the measures included within the Bill are:

• The Income Tax rates, thresholds, and allowances for 2019-20. This includes, meeting the government’s commitment to increase the basic personal allowance to £12,500 and the higher rate threshold to £50,000.
• The setting of the Corporation Tax rate for 2020-21 at 17%. The rate for 2019-20 remains at 19%.
• The temporary increase in the Annual Investment Allowance (AIA) from £200,000 to £1m for two years from 1 January 2019.
• The introduction of a new 30 day reporting and payment deadline for CGT on UK residential property gains from 6 April 2020.
• A number of changes to entrepreneurs’ relief including an increase in the minimum period during which certain conditions must be met to qualify for ER from one to two years.
• A reduction in the tax writing down allowance from 8% to 6% from April 2019.
• The current VAT registration limit (£85,000) and deregistration limit (£83,000) will continue to apply for a further two years; until 31 March 2022.

The proposed introduction of a new two tiered penalty system for Making Tax Digital has been dropped from the published Finance Bill. The legislation had been included in the draft Bill, but it appears the government needs more time to consider the complexities before including the measure in future legislation. In addition, and as announced at the Budget, the expected change to require shared occupancy to qualify for rent-a-room relief has been shelved.

Over the last number of years, the government has announced a raft of measures to encourage the use of cleaner vehicles and drive the growth of the electric car sector. Some of these measures specifically look at making more electric vehicle charging points available at workplaces and homes across the UK.

The Electric Vehicle Homecharge Scheme (EVHS) is provided by the Office for Low Emission Vehicles (OLEV), and offers a grant of up to a 75% contribution towards the cost of installing one chargepoint up to a maximum of £500. Using a chargepoint is safer and quicker than a conventional plug socket.

In order to qualify for the grant, the applicant must have purchased an eligible electric or plug-in hybrid vehicle on or after 01 October 2016. The household in question must also have off-street parking, and must use an OLEV-approved home charging point installer. The EVHS funding is limited to one installation per eligible vehicle and up to a maximum of two charging points per household.

The authorised installer will claim for the grant on behalf of the householder. The remaining cost should be agreed with the installer prior to installation of the charging point. There are separate government schemes to encourage the use of electric charging points for eligible businesses, charities and public sector organisations as well as for local councils installing on-street residential chargepoints for plug-in electric vehicles.

The Help to Save scheme for people on low incomes was officially launched in September 2018 following an 8-month trial. The scheme allows those in work entitled to Working Tax Credit and in receipt of Working Tax Credits or Child Tax Credits, to save up to £50 a month for two years and receive a 50% government bonus.

The scheme is also open to UK residents who are claiming Universal Credit and have a household or individual income of at least £542.88 for their last monthly assessment period. Payments from Universal Credit are not considered to be part of household income.

Payments under the scheme can be made by standing order on a weekly, fortnightly, or monthly basis and one-off payments by debit card are also possible. Account holders will then be able to continue saving under the scheme for a further 2 years and receive another bonus. This could see those on low incomes receive a bonus of up to £1,200 on maximum savings of £2,400 for 4 years from the date the account is opened. After the 4 years, the Help to Save account will be closed and savers will not be able to reopen it or open another Help to Save account. The account balances are expected to be rolled over into successor accounts.

There are no limits on how the money used can be spent but it is hoped that the money will be saved for urgent costs. Money paid into the account can be withdrawn at any time, but this could affect the size of the bonus payment.

Under certain circumstances, taxpayers can apply to HMRC for clearance or approval for a specific transaction. This can help give certainty about how a proposed transaction will be treated. Of course, there are numerous caveats to seeking clearance and the taxpayer must have provided all relevant facts regarding the intended transaction. If any relevant information was not provided, then HMRC’s clearance will be invalid.

There are two types of clearance available. A statutory clearance / approval or a non-statutory clearance / approval.  Statutory clearance applications can be made to HMRC before the relevant transaction or event has taken place based on the underlying legislation. Although, it is not mandatory to do so in cases where statutory clearance is available, it is usually recommended to obtain HMRC’s approval up-front.

The non-statutory clearance service concerns areas of tax where the legislation does not otherwise provide for a formal clearance process. Before using this service HMRC requires the taxpayer to check a transaction is not covered by a more appropriate clearance or approval route, and to have fully considered HMRC’s guidance about all clearance and approval routes.

HMRC does not provide clearances or advice for the application of the ‘settlements legislation’ or the tax consequences of executing non-charitable trust deeds or settlements. In addition, HMRC does not provide either formal or informal clearances that the general anti-abuse rule (GAAR) does not apply or in cases that in HMRC’s view relate to tax avoidance.

The Criminal Finances Act provides law enforcement agencies with greater powers to recover the proceeds of crime, tackle money laundering, tax evasion and corruption, and terrorist financing. The Act, which came into force on 30 September 2017, introduced two new criminal offences for corporations: one applying to the evasion of UK taxes and one applying to the evasion of foreign taxes.

These offences relate to the evasion of UK and foreign taxes and hold corporations and partnerships criminally liable when they fail to prevent their employees, agents, or others who provide services on their behalf from criminally facilitating tax evasion.

Where UK tax evasion has been found to take place, the offence can be tried by the courts of the United Kingdom regardless of whether the company who performs the criminal act of facilitation has a business presence in the UK or overseas.

HMRC is responsible for investigating offences in relation to UK tax whilst the Serious Fraud Office is responsible for investigating offences in relation to foreign taxes.

In a joint statement issued by HM Treasury and the Bank of England it had been confirmed that the £50 note is to continue to be part of the UK currency. The new £50 note will be designed and printed on polymer, a thin flexible plastic that includes a number of important new security features. Polymer notes are cleaner, safer and stronger than existing paper notes.

We have already witnessed the launch of new £5 and £10 notes. A new £20 note featuring J.M.W Turner is expected to enter circulation in 2020. The new £50 note will follow at a future date.

There had been speculation that the £50 note might be withdrawn due to concerns that the notes are being forged and used for money laundering and tax evasion. However, there is evidence that the demand for the £50 note is continuing to rise as it gives people more flexibility over how they spend and manage their money.

Sarah John, the Bank of England’s Chief Cashier, said:

‘I’m very excited to be starting the process of introducing a new £50 note. At the Bank, we are committed to providing the public with high quality notes they can use with confidence. Moving the £50 note onto polymer is an important next step to ensure that we can continue to do that.’

The Financial Secretary to the Treasury, Mel Stride has confirmed that the government will publish Finance (No.3) Bill on Wednesday, 7 November 2018. The Bill is so named as it is the third Finance Bill in the current special two-year session of Parliament. The Bill will contain the legislation for many of the tax measures announced by the government. The Bill is colloquially known as Finance Bill 2018-19 and will become Finance Act 2019 after Royal Assent is received.

The publication of the Bill will follow the Autumn Budget 2018 which will be held on Monday, 29 October 2018. The timing of the Budget should allow the Finance Bill to pass through Parliament before any controversial Brexit legislation is put before the House.

This is the second Budget to take place in the autumn following the government’s decision to switch to a new Budget cycle. The Budget will be followed by a Spring Statement in 2019 where the government retains the option to make changes to fiscal policy if the economic circumstances require it. Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s Budget speech.