Business rates
The government will provide support for businesses facing significant increases in bills following the business rates revaluation due to take effect in England from April 2017. This includes:
- support for small businesses losing Small Business Rate Relief (SBRR) to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses. This means no small business that is coming out of SBRR will pay more than £600 more in business rates than they did in 2016/17; and
- providing English local authorities with funding to support £300m of discretionary relief, to allow them to provide support to individual ‘hard cases’ in their local area.
The government will also introduce a £1,000 business rate discount for public houses with a rateable value of up to £100,000, subject to state aid limits for businesses with multiple properties, for one year from 1 April 2017.
At Budget 2016 the government announced an aim to deliver more frequent revaluations of properties – at least every three years. The government will set out its preferred approach for delivering this aim at Autumn Budget 2017 and will consult ahead of the next revaluation in 2022.
5G and broadband
The government has published a new 5G Strategy, which includes an investment of £16m to trial new 5G technology. There will also be £200m for local projects to build ‘fast and reliable’ full-fibre broadband networks.
Salary sacrifice
As announced at Autumn Statement 2016, legislation will be introduced in Finance Bill 2017 to remove income tax and employer NICs advantages where benefits-in-kind are provided through salary sacrifice or other optional remuneration arrangements. Changes will take effect from 6 April 2017.
A transitional rule will protect employees who are in contractual arrangements before 6 April 2017 until the earlier of a variation or renewal of the contract or 6 April 2018, except for cars with CO2 emissions above 75 g/km, accommodation and school fees, for which the final date is 6 April 2021.
Employer-provided pensions and pension advice, childcare vouchers, employer-provided childcare and workplace nurseries, cycle to work schemes and ultra-low emissions cars with CO2 emissions not exceeding 75 g/km will be excluded from this measure.
Tax-Free Childcare scheme for working parents
A new Tax-Free Childcare scheme will provide up to £2,000 a year in childcare support for each child under 12. Parents will be able to receive up to £4,000 for disabled children up to the age of 17. The scheme is being rolled out gradually from early 2017, starting with parents of the youngest children. All eligible parents will be able to access the scheme by the end of the year.
To qualify for Tax-Free Childcare, parents will have to be in work and each earning at least £115 a week and not more than £100,000 each per year. Unlike the current Employer-Supported Childcare scheme, self-employed parents will also be able to benefit. Parents will need to open an online account, which they can pay into to cover the cost of childcare. For every 80p paid in, the government will then top up the account with an extra 20p.
Later this year working parents in England will also be able to apply for an additional 15 hours of free childcare for three and four year olds, bringing the total to 30 hours a week.
Disclosure of indirect tax avoidance schemes
As announced at Autumn Statement 2016, legislation will be introduced in Finance Bill 2017 to strengthen the regime for the Disclosure of Indirect Tax Avoidance. Provision will be made to make scheme promoters primarily responsible for disclosing schemes to HMRC and the scope of the legislation will be extended to include all indirect taxes, including the Soft Drinks Industry Levy. Details of the tests to apply to arrangements to determine if they should be disclosed to HMRC will be contained in regulations. These measures will come into effect on 1 September 2017.
Making Tax Digital (MTD)
The government’s landmark Making Tax Digital initiative is due to be implemented between 2018 and 2020, with the stated aim of creating a ‘transparent and accessible tax system fit for the digital age’. The new MTD regime will see the phased introduction of a fully digital system, with businesses and individuals required to register, file, pay and update their information via a secure online tax account.
By 2020 most businesses, self-employed individuals and landlords will be required to use software or apps to keep digital business records, and to make regular updates regarding their income tax, VAT and NICs online.
In the Spring Budget the government announced a one year deferral from the mandating of MTD for unincorporated businesses and landlords with turnovers below the VAT registration threshold. They will now be required to start using the new digital service from April 2019. The government will also consult on the design aspects of the tax administration system, including interest and penalties, with the aim of adopting a consistent approach across taxes.