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Finance Bill 2015: TaxCalc's impact report

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31st Mar 2015
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Now that the excitement of Budget 2015 is over, the real business of understanding and interpretation begins.

To help with this task, Rebecca Benneyworth has parsed the dense pages of Budget 2015 for AccountingWEB. The TaxCalc-sponsored whitepaper breaks down George Osborne’s Budget into salient, easily digestible nuggets. These include:

Capital allowances

The 100% ECA (enhanced capital allowances) applying to zero emissions goods vehicles, low emission cars and refuelling equipment are all due to end on 31 March 2015 for companies and 5 April 2015 for income tax businesses.

Finance Bill 2015 extends the period for each to 31 March (or 5 April) 2018, with some small additional limitations.

Company Cars

The benefit in kind rate applying to company cars with various emissions ratings will be further increased by Finance Bill 2015, broadly in line with previous indications.

  •  Increasing the rates for cars without an emissions rating, and for those registered before 1 January 1998 in both 2017 and 2018, by 2% on each occasion, although these changes had not previously been announced.
  •  Capping the maximum percentage for diesel cars registered after 1 January 1998 at 37%.
  •  Changing the minimum benefit on the main table to 17% in 2017 and 19% in 2018.
  •  Increasing the favourable rates for very low emission cars by 2% each in 2017 and 4% each in 2018. Budget 2015 included an announcement for the following year (2019/20) which will see the main table rise by a further 3%. 

Trivial benefits

Certain trivial benefits (such as a modest gift at Christmas or similar) are disregarded in taxing employees; however this is not a statutory arrangement – merely HMRC practice. Finance Bill 2015 puts this exemption on a statutory footing, with a list of qualifying benefits and a financial limit of £50.

Employers will not need to report qualifying benefits on forms P11D, nor settle tax on them through a PAYE settlement arrangement. Although this measure was due for Finance Bill 2015, it has not been included and the start has been delayed to 2016.

Direct Recovery of Debts

The legislation that has been released for comment includes some of the concessions granted in the autumn of 2014 after a significant campaign of opposition to this measure. The key additional safeguard is the right of appeal to the County Court when HMRC proposes to use these rules against a taxpayer.

The measures will not be implemented before the general election and there would seem still to be a certain amount of ‘ironing out’ to do before the legislation is in the right place. With further work this legislation will be a useful additional power for HMRC without being an unacceptable threat to law abiding taxpayers

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