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Employment law changes taking effect in April 2017

23 Mar, 2017

The following key changes to employment law will come into force in April 2017:

Finance Bill 2017

23 Mar, 2017

The Finance Bill 2017 was published on 20 March 2017 and runs to a mammoth 762 pages, comfortably taking the record for the longest bill from Finance Bill 2012 which ran to 686 pages. The Bill together with the explanatory notes contains 313,031 words. The Bill contains the legislation for many of the tax measures that have been announced by the government at Spring Budget 2017 and Autumn Statement 2016.

VAT fuel scale charges

23 Mar, 2017

The new VAT road fuel scale charges have been published. The changes amend the VAT scale charges for taxing private use of road fuel to reflect changes in fuel prices.

The new fuel scale charges must be used by companies from the start of their next prescribed accounting period beginning on or after 1 May 2017. The fuel scale rates continue to encourage the use of cars with low CO2 emissions.

The revalorisation of fuel scale charges is no longer part of the Budget process and the tables are published by HMRC annually.

Inheritance Tax main residence nil-rate band

23 Mar, 2017

The new Inheritance Tax main residence nil-rate band (RNRB) came into effect on 6 April 2017. The RNRB is a new transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The RNRB is on top of the existing £325,000 Inheritance Tax nil-rate band (NRB) threshold.

Tackling money laundering

23 Mar, 2017

HM Treasury has announced that a new watchdog is to be established to help tackle potential weaknesses in the supervisory system that criminals may be trying to exploit. The new office for professional body anti-money laundering supervision (OPBAS) is expected to be operational from the start of next year. The new watchdog will be tasked with improving the overall standards of anti-money laundering supervision and will work closely to enhance the interaction between supervisors and law enforcement.

Salary sacrifice changes

16 Mar, 2017

There will be changes to the tax rules for salary sacrifice schemes from April 2017. These changes will see the removal of the tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement.

The following benefits will not be affected by these changes:

Combatting pension scams

16 Mar, 2017

In December 2016, the Department for Work and Pensions together with HM Treasury launched a consultation on a package of measures to tackle three different areas of pension scams. Pension scams commonly target those who have not yet reached the minimum pension age.

The three areas being considered are:

Is a Self Assessment return required?

16 Mar, 2017

There are a number of reasons why a taxpayer needs to complete a Self Assessment return. This includes if they are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property.

Taxpayers that need to complete a Self Assessment return for the first time should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October following the end of the tax year for which a Self Assessment return needs to be filed.

Card Transaction Programme disclosure opportunity

16 Mar, 2017

HMRC’s Card Transaction Programme is a new disclosure opportunity for businesses that accept card payments and have not paid the right amount of tax due. The campaign offers the opportunity for affected businesses to bring their affairs up to date and in doing so take advantage of the best possible terms.

HMRC cites examples of businesses who might take advantage of the scheme. For example, a business:

Checking IR35 employment status

16 Mar, 2017

HMRC has launched a new software program to enable interested parties to check an individual’s employment status for tax. The new software will provide HMRC’s view as to whether IR35 legislation applies to a particular engagement and whether a worker should pay tax through PAYE.

Whilst the new software will be of most interest to the public sector in advance of the new rules coming into effect next month, the service can be used for current or future engagements in both the private and public sector.

The software can be used to check the employment status of:

Reduced Money Purchase Annual Allowance

16 Mar, 2017

The MPAA applies to individuals who have flexibly accessed their pension benefits and were introduced to stop abuse of the pension system under certain circumstances. The annual allowance that applies in respect of money purchase pension contributions is to be reduced from £10,000 to £4,000 from 6 April 2017. This measure has been put in place to prevent inappropriate ‘double tax relief’ by those aged 55 and over who have already taken money from their pension pots.

New HMRC employment status checker tool goes live

13 Mar, 2017

HMRC has published a new “check employment status for tax” online tool which you can use to find out if you, or a worker on a specific engagement, should be classed as employed or self-employed for tax purposes.

The service will give you the view of HMRC on whether the intermediaries legislation (IR35) applies to an engagement and whether a worker should pay tax through PAYE for an engagement. It can be used for current or future engagements in the private or public sector.