HMRC have announced that by 2020 they expect all businesses to upload their profit and loss quarterly and electronically. Though we are still awaiting the details of how the logistics of it will work, two things are sure:
it is definitely going to happen; and
having a cloud accounting system in place will make this as easy as clicking a button.
Charities are certainly adapting to changing funding environments. In seeking to reduce reliance on grant funding, many charities have looked to increase enterprise trading and charging for services. But the tax impacts of developing new opportunities and even delivering the same services under different arrangements have sometimes been overlooked – these need to be on a charity’s radar.
Finance Bill 2017 has now been passed, but with only 148 of the original 762 pages. Almost 90% of the tax legislation we were expecting to be passed has now been delayed. So what has changed?
In short – the general election. As Parliament was dissolved on 3 May in advance of the election it was agreed to hold over much of the more complex technical legislation.
Making Tax Digital for Business (MTDfB) is a key part in the Government’s plan to modernise the tax system – it is the biggest change in tax administration in decades.
It will affect every business in the UK, including those with rental income, and will change the way that businesses keep their accounting records, report profits and interact with HM Revenue & Customs (HMRC).
Much has changed since last year’s Budget, when we were anticipating the EU Referendum and very few people would have predicted that Donald Trump would become US President. We might also have anticipated that George Osborne would still be controlling the purse strings, and that ‘Remain’ had won the day in the Referendum.
There are proposed changes to the national insurance system which will impact on a number of people, and in particular those who have left the UK to work overseas.
The proposal is that Class 2 national insurance contributions (NIC) will be abolished. Class 2 is £2.85 per week from 5 April 2017 and for UK residents it is normally paid by self-employed people, together with Class 4 NIC, which is charged as a percentage of profits made.
There has been much commentary in the last week or so concerning the reduction in the Dividend Allowance. This follows the Chancellor’s surprise announcement in the Spring Budget that this would be reduced to £2,000 from April 2018. It would seem an appropriate time to remind individuals that significant changes took place to the taxation of dividends at the start of this current tax year when the £5,000 Dividend Allowance commenced.
With the forthcoming change in rates for the National Minimum wage (NMW) I wanted to take the opportunity to highlight a number of risks that may arise for employers.
Paying the incorrect rate
With every NMW increase there is the risk that the increase is not applied in a timely manner to your employees’ pay.
Making Tax Digital – charities exempt but trading subsidiaries will be affected
The Government has confirmed that it will introduce legislation to exempt charities from the Making Tax Digital requirements. This is welcome and will protect smaller charities and those with limited digital capability.
With the vast majority of measures already being announced, and with very few sector specific announcements, there were no real surprises for the Not for Profit (NFP) sector in the 2017 Spring Budget.
Items with a NFP focus which were previously made public and will come into effect shortly include:
Amendments to Social Investment Tax Relief (SITR) – whilst the government has increased the amount of investment which can be raised under this scheme to £1.