Written by Andy Vessey – contractorweekly.com
Main Points for Contractors Rather frustratingly, HMRC did not publish their anticipated report of the IR35 review to coincide with Chancellor George Osborne’s Autumn Statement as some had anticipated. Whilst the complete reform of Stamp Duty Land Tax caught the headlines, there was at least one major talking point for the freelance community to discuss, that being the government’s announcement that they intend to bring Umbrella companies under the microscope. Perhaps coincidental that this announcement should come shortly after the Low Incomes Tax Reform Groups report, ‘Travel expenses for the low-paid – time for a rethink?’, the government will now review the increasing use of overarching contracts of employment by employment intermediaries such as Umbrella’s. These arrangements enable workers to obtain tax relief for home to work travel that would otherwise not be available. The government will publish a discussion paper shortly to inform possible action at next year’s Budget. Travel and Subsistence Following the announcement at Budget 2014 that the rules for tax relief on travel and subsistence payments would be reviewed, HMRC has already undertaken the initial stages of this review and will aim to launch a full public consultation on the framework for the new rules. Employee Benefits and Expenses Again, following on from another of this year’s Budget announcements, the administration of employee benefits and expenses will be simplified and from April 2015 there will be a statutory exemption for trivial benefits-in-kind costing less than £50. Certain reimbursed expenses are also to be exempted. This will not apply however to reimbursed expenses that are claimed when paid in conjunction with a salary sacrifice scheme. Tax Avoidance Serial tax avoiders that repeatedly use known tax avoidance schemes will be the subject of a consultation that will consider action that could be taken against them by imposing additional financial costs, compliance and reporting requirements. Tax Compliance and Administration A consultation will be launched to consider a proposal to introduce a new power, enabling HMRC to achieve early resolution and closure of one or more aspects of a tax enquiry whilst other aspects remain open. Income Tax and NIC As from 6th April 2015 the personal allowance will increase to £10,600 (currently £10,000) and the basic rate limit will decrease by £80 to £31,785. Savings An additional Individual Savings Account (ISA) allowance will be introduced for spouses or civil partners when an ISA saver dies, equal to the value of that saver’s ISA holdings on their date of death. Capital Gains Tax (CGT) A digital calculator will be introduced for CGT. Written by Andy Vessey – http://www.contractorweekly.com 