Draft material for the 2017 Finance Bill is expected to be published on 5 December 2016.
At the time of the March 2016 Budget the Government indicated its intention to legislate on the following matters in the 2017 Finance Bill. In many of these cases a consultation exercise has been carried out over the intervening period, and legislation is subject to the outcome of this process.
There are other issues on which the government is consulting with a view to making changes (if at all) in the 2018 Finance Bill or a subsequent Bill, or by statutory instrument.
- Long-term residents: non-domiciled individuals deemed UK- domiciled once resident in the UK for 15 out of the last 20 years, from 6 April 2017.
- Non-domiciled individuals born in the UK to UK-domiciled parents: deemed UK-domiciled for income tax and capital gains tax while resident in the UK, from 6 April 2017.
- Deduction of tax at source from interest: deduction requirement removed for interest from open-ended investment companies, authorised unit trusts, investment trust companies, and peer-to-peer loans, all from 6 April 2017.
- Personal portfolio bonds: updated list of assets that policyholders can invest in without giving rise to an annual tax charge, from an unspecified date.
- Authorised contractual schemes: rules for these investment funds to be ‘streamlined’ from an unspecified date (either in the 2017 Finance Bill or by statutory instrument depending on the changes decided upon).
- Life insurance policies: changes to prevent excessive tax charges on part surrenders or part assignments, from an unspecified date.
- Inheritance tax for non-domiciled individuals: deemed domicile status broadly aligned with new income tax and CGT position above, from 6 April 2017.
- UK residential property held through offshore structures: subject to IHT as if held directly, from 6 April 2017.
- Benefits in kind: simplifying and clarifying dates for ‘making good’ payments (proposed for a future Finance Bill, not necessarily 2017, from an unspecified date).
- Off-payroll working in the public sector: public-sector bodies and agencies made responsible for operating the tax rules, from April 2017.
- Termination payments: rules ‘clarified and tightened’; all payments in lieu of notice and some damages payments taxable as earnings; foreign service relief removed; from April 2018.
- Corporate interest expense: very broadly, deductions for interest above £2 million will be capped at 30% of a group’s taxable earnings in the UK before interest, depreciation and amortisation (tax-EBITDA) from 1 April 2017.
- Increased flexibility in corporation tax loss relief: brought forward losses to be available to set against profits from different types of income and profits of other group companies from 1 April 2017.
- Use of corporation tax losses restricted: to 50% of a company’s or group’s profits in excess of £5 million arising on or after 1 April 2017.
- Corporation tax losses of banks: existing restriction of loss set-off to 50% of profits reduced to 25% from 1 April 2016.
- Museums and galleries tax relief: a relief for temporary and touring exhibitions costs, from 1 April 2017.
- Substantial shareholdings exemption: various possible changes from an unspecified date.
- Simplifying tax rules for businesses, self-employed and landlords: from unspecified dates, but to co-ordinate with the ‘Making Tax Digital’ programme.
- Property and trading income allowances: individuals with income below a £1,000 limit will not be taxable, and above that figure they may deduct either actual expenses or £1,000, from 6 April 2017 (separate limits for trading and property income).
- Partnership taxation: technical and administrative changes (proposed for introduction in a future Finance Bill, not necessarily 2017).
- Plant and machinery - lease accounting: changes in response to new IASB accounting standard IFRS16 (proposed for a future Finance Bill, not necessarily 2017).
Value added tax
- ‘Making Tax Digital’: various changes to reporting and payment requirements for individuals and companies, to be implemented in stages from 6 April 2018.
- Offshore evasion – requirement to correct: a requirement to correct past errors by September 2018.
- HMRC access to data held by money service businesses: new powers from an unspecified date.
- Fulfilment house due diligence scheme: to be introduced from 2018.
- Penalties for participating in VAT fraud: changes from an unspecified date.
Customs and excise duties
- Aggregates levy: exemption for by-product of laying utility pipes, from 1 April 2017.
- Landfill tax: changes to definition of taxable disposal, from 1 April 2017.
- Air passenger duty: rates increased in line with retail prices index, from 1 April 2017.
- Soft drinks levy: to come into effect in April 2018.
- Sanctions to tackle illicit tobacco: from an unspecified date.
- A minimum excise tax for cigarettes: from an unspecified date.
- Remote gaming duty: changes to the treatment of freeplays from an unspecified date.
- Customs enforcement powers: clarification of HMRC powers to obtain access to locked vehicles, from an unspecified date.