A round up of other news this week.
On 7 February 2020 HMRC announced an amendment to the forthcoming changes to the off-payroll working (IR35) rules to give businesses more time to prepare. As originally drafted, the rules would have applied to any payments made on or after 6 April 2020, regardless of when the services were carried out. The new rules will now apply only to payments made for services provided on or after 6 April 2020. HMRC have also published draft guidance on the new off-payroll working regime.
With the exception of companies who have tax deducted under the Non-resident Landlord Scheme and are not required to file a tax return, from 6 April 2020, Non-UK resident companies will pay Corporation Tax instead of Income Tax on profits from a UK property rental business. This includes those who invest in UK property through collective investment vehicles. HMRC have now published guidance on the change in legislation. The guidance covers a number of administrative matters including corporate tax registration, payment and return submission, and technical points on relief for finance expenses and transitional rules relating to the transfer of existing capital allowances and losses.
The Conservative Party Manifesto issued in advance of last year’s General Election included a commitment to raise the National Insurance Contribution (NIC) threshold from its current £8,632 to £9,500 this year. On 30 January 2020 the Chancellor of the Exchequer announced that the increase in the threshold, which will apply to both employees and the self-employed, will be brought in through secondary legislation. All the other NIC thresholds and limits, except for the upper NICs thresholds which will remain frozen at £50,000, will rise with inflation. An effect of this is that employer’s NIC will be due on earnings above a lower threshold (£8,788) than that for employee’s NIC. The changes will be effective for the tax year beginning 6 April 2020.
For UK residents, new rules come into effect from 6 April 2020 which require a return and payment of CGT within 30 days of a disposal of UK residential property. This will significantly reduce the time for payments as well as increasing compliance requirements. The legislation permits reasonable estimates of valuations needed to compute the gain where the information is not available before the payment deadline. Disposals of non-UK properties by UK resident owners are not caught by these reporting requirements. HMRC have recently confirmed to the CIOT that where contracts are exchanged under an unconditional contract in the tax year 2019/20 but completion takes place on or after 6 April 2020, the new regime will not apply and the gain should be reported in the 2019/20 self-assessment return in the usual way.
Action 13 of the Base Erosion and Profit Shifting (BEPS) Project established a three-tiered standardised approach to transfer pricing documentation, including a Country-by-Country Report (CbC report). The BEPS Action 13 report also included a requirement that a review of the CbC reporting minimum standard be completed by the end of 2020. As part of this review, on 6 February 2020 the OECD published a consultation document and invited public comment, in particular with regard to a number of questions raised throughout the document. Comments are requested by 6 March 2020 with a public consultation meeting following on 17 March.
HMRC have published the awaited detailed technical consultation and draft regulations to expand the Trust Registration Service (TRS) in order to comply with the Fifth Money Laundering Directive (5MLD). This consultation includes proposals on the types of express trusts that will be required to register, data collection and sharing, and penalties. This consultation closes on 21 February 2020.
Following the recent Bank of England decision on interest rates, KPMG’s Chief Economist in the UK, Yael Selfin, commented “on balance, holding rates a wise move for the UK economy”.
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