The Chancellor announced several changes, including:
Making Tax Digital (MTD)
The government confirmed a light touch approach to penalties in the first year of MTD’s implementation. MTD will not be extended to any new taxes or businesses in 2020.
The timing of the reduction in the co-investment rate for employers from 10% to 5% and the increase to 25% in the amount that employers can transfer to their supply chains will be brought forward. These changes now take effect from April 2019.
Immigration controls – scientists and researchers
From Autumn 2019, PhD-level occupations will be exempt from the Tier 2 (General) cap. At the same time, the rules on 180-day absences will be changed so that researchers conducting fieldwork overseas will not be penalised if they apply to settle in the UK.
New export facility
UK Export Finance will introduce a new General Export Facility to provide more flexible short-term support to UK exporters and will publish further details once they become available.
The government published two documents outlining its existing approach to tax avoidance and related issues: Tackling tax avoidance, evasion and other forms of non-compliance and offshore tax compliance strategy, No Safe Havens 2019. The government also published for comment Structures and buildings allowance – draft legislation, on the new allowance for investments in non-residential structures and buildings announced in the 2018 Budget. It is intended to lay this legislation early this summer. The relief will be given as an annual 2% flat rate over 50 years for new commercial structures and buildings.
In the coming months, government publications will include:
- Review of time limits – a report on the time limits for the recovery of lost tax involving an offshore matter, comparing them with other time limits. It will set out the rationale for the charge on disguised remuneration loans and will be laid by 30 March 2019.
- Preventing abuse of the R&D tax relief for small- or medium-sized enterprises – a consultation on the application of the measure announced in the 2018 Budget.
- Child Trust Funds (CTF) – a consultation on maturing CTFs and the regulations to ensure that they can retain their tax-free status after maturity.
- VAT partial exemption and capital goods scheme: simplification – a call for evidence on potential changes to the VAT Partial Exemption regime and the Capital Goods Scheme.
- Social investment tax relief (SITR) – a call for evidence on the scheme, including why it has been used less than expected and its impact on finance for social enterprises.
- Enterprise investment scheme (EIS) approved funds guidelines – draft guidelines and draft legislation, with proposed HMRC policy and practice for approving EIS funds.
- CGT private residence relief – a consultation on the capital gains tax (CGT) changes announced in the 2018 Budget to lettings relief and the final period exemption.
Summaries of responses will be published to various consultations.
- Protecting your taxes in insolvency – the consultation followed the announcement in the 2018 Budget proposing to make HMRC a secondary preferential creditor for certain tax debts paid by employees and customers on insolvency business.
- Corporate capital loss restriction – the consultation was about a change announced in the 2018 Budget to restrict, from 1 April 2020, the amount of carried-forward capital losses a company can offset to no more than 50% of the chargeable gains arising in a later accounting period.
- Stamp taxes on shares consideration rules – the consultation was about the introduction of a general market value rule for transfers between connected persons, aligning the consideration rules for stamp duty and stamp duty reserve tax.
- Digital services tax – the consultation was on the s of the digital services tax that will take effect from 1 April 2020.
- Amendments to tax returns – there has been call for evidence on simplifying the process of amending a tax return.