General

The First-Tier Tribunal (FTT) has recently published its decision in a long running case that focused on tax planning arrangements. This important decision represents a significant win for HMRC against a tax avoidance promoter in a case that has been before the FTT since June 2018. The firm in question launched and promoted an arrangement known as the Alchemy scheme. The FTT was clear that this scheme was inherently implausible from the outset.

The scheme involved selected employees (usually directors) entering a high-risk form of gambling, known as spread betting. The scheme’s intended result was a tax-free betting win for the individual employee, which was taken instead of taxable employment income, and a tax-deductible expense for the company.

HMRC has said that the decision by the FTT could lead to the recovery of £2.4 million in tax and National Insurance Contributions (NICs) in this specific case, with a further £110 million in related cases. The FTT also agreed with HMRC’s argument that Disguised Remuneration legislation would apply to the arrangements.

The decision in this case is likely to be appealed.

The Help to Save scheme can assist those on low incomes to boost their savings. The scheme was launched in September 2018 and new figures just published by HMRC have revealed that over 163,000 people have signed up depositing more than £53 million.

The scheme is open to working people who receive tax credits or universal credit and with a minimum earned income equivalent to 16 hours per week at the National Living Wage in their last assessment period.

Account holders using the scheme can save between £1 and £50 every calendar month for up to two years and will then receive a 50% Government bonus. 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 can then continue saving under the scheme for a further 2 years and receive another bonus. This could result in account holders receiving a bonus of up to £1,200 on maximum savings of £2,400 for 4 years from the date the account is opened. After 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. The Government is urging anyone that is eligible to use the scheme to look at the benefits and sign up as soon as possible.

The new £20 note entered into circulation on 20 February 2020 and features the image of the artist JMW Turner. It will take a few weeks for the notes to become commonplace across the country. The new £20 note includes a number of new security features including two windows and a two-colour foil, making it very difficult to counterfeit.

The new £20 note joins the current £5 and £10 notes in being printed on polymer, a thin flexible plastic. It has already been confirmed that a new £50 note will be issued in 2021 featuring Alan Turing, completing the updating of all current Bank of England banknotes.

In tandem with the launch of the new £20 note the process of withdrawing the current paper £20 notes from circulation will begin. The paper £20 notes will remain as legal tender until they are withdrawn. The exact date that the paper notes are to be withdrawn has not yet been announced. The Bank of England has confirmed it will give six months’ notice ahead of the paper notes being withdrawn as legal tender. Even after the old £20 notes have been withdrawn, many banks will still continue to accept them as deposits from customers.

After a tumultuous few days in politics, it has been confirmed by the new Chancellor of the Exchequer, Rishi Sunak that the Budget will take place as planned on Wednesday 11 March 2020.

There has been fevered press speculation that the new Chancellor might delay the Budget date to give him more time to prepare. Rishi Sunak was previously the chief secretary to the Treasury and has had a meteoric rise to the top echelons of Government becoming Chancellor at the relatively tender age of 39.

The previous Chancellor, Sajid Javid, resigned on February 13 after resisting calls from the Prime Minister to sack all of his special advisers. Mr Javid will be partly remembered for being one of the UK’s few chancellors never to have presented a Budget to the House of Commons.

On Tuesday of this week, the new Chancellor posted a photo of himself preparing for the Budget and confirmed that he was 'cracking on with preparations for my first Budget on March 11. It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential'. This announcement was later followed by confirmation from HM Treasury that the Budget will go ahead as planned.

This will be the first Budget following the UK’s departure from the EU and we may see many new measures being announced. Details will be posted on this news-feed after the budget.

HM Treasury has confirmed that the new 'breathing space' scheme to help those with problem debts will become operational next year. The scheme will provide legal protections from creditor action while those affected will receive professional debt advice in order to find an appropriate solution to their debt issues.

The breathing space scheme will have a 60-day respite period during which individuals will be protected from almost all enforcement action by creditors whilst working with a debt advice agency. The scheme will apply to almost all personal debts such as credit cards and loans as well a wide range of debts owed to the Government. The use of the scheme will help prevent debts from continuing to spiral by stopping the accrual of contractual interest, default interest, fees and charges during the breathing space period.

The same measures will apply to certain vulnerable individuals working with Approved Mental Health Professionals. Creditors will also benefit from the introduction of the scheme with over £400 million in extra repayments expected in the first year, as individuals get the support they need to get their payments back on track. The Government has estimated that up to 700,000 people across the UK will use the scheme during its first year in operation.

The Chancellor recently announced that the level of funding for direct payments for farmers would continue for 2020 at the same rate as 2019. This has now been confirmed by the Department for Environment, Food & Rural Affairs (DEFRA).

This will help provide certainty to farmers allowing them to plan for the future, sow their crops and care for their livestock with confidence. The direct payments scheme forms the majority of spending under the CAP and provides subsidies to farmers based on the area of land under management.

The UK Government will also continue to fund existing Rural Development Programme (RDPE) projects and those approved by 31 December 2020 until those projects end.

Farming support schemes will continue to be run by:

• the Rural Payments Agency (RPA) in England
• DAERA in Northern Ireland
• the Welsh Government in Wales
• the Scottish Government in Scotland

It has also been confirmed that the current framework of rules and processes will stay the same, until DEFRA and the devolved administrations introduce new agriculture policies and schemes.

For the time being, travel between the EU and UK continues as before. This means that if you have any travel plans to the EU during the rest of 2020 you can expect the pre-Brexit withdrawal travel regulations will still apply.

However, new rules are likely to apply for travel to Europe from 1 January 2021. This is conditional on the transition period ending on 31 December 2020. 

This means that from 1 January 2021, if you hold a British passport you will need to ensure that your passport is valid for at least six months on the day you travel and be less than 10 years old (even if validity is more than 6 months). These rules apply when travelling to all members states of the EU (not including Ireland) as well as to other European countries including Switzerland, Norway, Iceland and Liechtenstein.

If you renewed your current passport before the previous one expired, extra months may have been added to its expiry date. Any extra months on your passport over 10 years may not count towards the 6 months needed.

If you are booking a holiday in Europe after 1 January 2021, you will need to keep abreast of any changes agreed. We will of course keep you posted.

Now that the formal Brexit withdrawal agreement is agreed, there will be changes to the rules for living, working, travelling and doing business in the UK and EU. These changes are expected to commence at the end of the transition period, from 1 January 2021.

While in the transition, the current rules on trade, travel, and business for the UK and EU will continue to apply.

Much is likely to change from 1 January 2021. This will include rules in relation to healthcare, driving, pet travel and mobile data roaming. For example, the European Health Insurance Card (EHIC) will be valid up to 31 December 2020, but its future remains uncertain after 1 January 2021.

Anyone driving in Europe may also need an international driving permit (IDP) to drive in some countries as well as an insurance 'green card' and a GB sticker.

The existing pet passport scheme will change from 1 January 2021 as will the guarantee of free mobile phone roaming throughout the EU, Iceland, Liechtenstein and Norway.

The Government has announced that a new 50 pence coin entered into circulation on 31 January to mark the UK’s departure from the European Union. The new coin, which was unveiled by the Chancellor, Sajid Javid, who is also the Master of the Mint bears the inscription "peace, prosperity and friendship with all nations" as well as the Brexit date of 31 January 2020.

Commenting after seeing the coin for the first time, the Chancellor of the Exchequer, Sajid Javid said:

'Leaving the European Union is a turning point in our history and this coin marks the beginning of this new chapter.'

The Government has confirmed that about 3 million of the coins will be distributed from banks, post offices and shops from Brexit day with another 7 million entering circulation later in the year.

The launch of the coin underlines the long running Brexit saga as this is the third time that the launch of a special Brexit coin has been announced. The first launch of the coin was planned for the original Brexit date of 31 March 2019 and the second launch for the delayed 31 October 2019 Brexit date when an estimated 1 million coins had to be melted down.