A round up of other news this week.
The Office of Tax Simplification (OTS) has been asked by the Government to suggest changes to inheritance tax (IHT) rules to simplify them in certain areas. Its second report was published on 5 July 2019 and some significant proposals were included. The Government will no doubt consider these proposals but it is not known at this stage how many of them will be taken up. The key points include:
The ‘hybrid capital instruments’ rules are a new set of rules which (from 1 January 2019) are primarily relied upon by many banks and insurers to give corporation tax relief for the coupon payments on regulatory capital securities. In a previous edition of Tax Matters Digest, published on 26 April 2019, we reported that the Government were proposing to amend these rules to ensure they work as intended for instruments with a takeover or change of control clause. The Government has now published draft regulations implementing this proposed change for consultation (available here). The consultation was launched on 5 July 2019 and will close on 9 August 2019.
In a press release published on 11 July 2019, HMRC urged businesses with annual taxable supplies above £85,000 to sign up online for Making Tax Digital (MTD) before the first quarterly VAT return filing date of 7 August. The MTD rules became law for VAT periods starting on or after 1 April 2019 unless the business is deferred. They require VAT-registered businesses that meet the turnover threshold (as well as taxpayers that opt-in to the system voluntarily) to keep their VAT records digitally and submit their VAT returns from MTD-compatible software. The press release reports that more than 600,000 businesses have signed up, with more than 400,000 submissions successfully made. The press release highlights the requirement for taxpayers that pay VAT by direct debit to register by 27 July 2019.
From 30 August 2019, people in England with ‘hidden disabilities’ such as anxiety and dementia may be able to apply for blue badge car parking permits (see this UK Government article for more information). Holders of the badge could also pay less income tax on company car benefits. This works by adjusting the way the ‘benefit in kind’ is valued for blue badge holders where certain conditions are met, for example by treating automatic cars as their manual equivalents if the manual equivalent has a lower list price and/or CO2 emissions, and disregarding the cost of certain equipment needed for the driver to use the car. These car benefit adjustments can be made by the employer on the P11D, or claimed by the employee through self-assessment. Employers might therefore wish to make employees aware of the availability of these reliefs in order to encourage uptake.
The latest GDP data have been released with Yael Selfin, KPMG in the UK’s Chief Economist, stating “weak May figures confirm Brexit-related uncertainty keeps its hold on the economy”.
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