Delivering the coalition’s last Queen's Speech before the 2015 general election, the Queen outlined several measures that will affect small businesses and their advisers.
Included in the package is a serious crime bill that will create a new offence of "participating in an organised crime group" that could land accountants and other advisers who turn a blind eye in prison for up to five years. This has already aroused considerable controversy and is the subject of a continuing debate in David Winch's Money laundering and crime discussion group.
And contrary to the opinion expressed by AccountingWEB editor John Stokdyk in the BusinessZone live blog (see below) on the day, legislation to enact reforms to national insurance to “to tackle avoidance and to simplify their collection from the self-employed” wasn’t a complete surprise - it follows on from plans set down by the Chancellor in his March Budget to bring Class 2 NICs into the self assessment system.
Somewhat disingenuously, the National Insurance Bill will also be the vehicle for reforms that have caused considerable controversy within the accounting profession - the introduction of follower notices and accelerated payments as set out in January’s Tackling marketed tax avoidance consultation document.
HMRC’s explanatory notes on legislative plans for 2015 talk of the department seeking accelerated payments for NICs in dispute, but the measures will also apply to other types of tax.
Smith & Williamson national tax partner Tina Riches told the Telegraph the measure flies in the face of the British justice system. “Normally if there’s an issue you can take it court and an independent judge can decide,” she said.
“But if you’ve got to pay the tax up front before you can get anywhere near the court you could image that people could end up just deciding to pay the tax and not pursue what is actually a legitimate case.”
Here is a brief overview of the new laws that are likely to affect accountants in the coming year.
National insurance bill
The bill will set out to protect public revenues by tackling avoidance, but also promises relief to “hardworking taxpayers” by simplifying the collection of Class 2 NICs from the self-employed.
It will also introduce accelerated payments for “amounts of NICs in dispute in avoidance cases” and allow HMRC to seek payments from cases where it issues a “follower notice” to taxpayers using schemes similar to any that have been defeated at tribunal.
The law also promises new information powers and penalties for promoters of high-risk avoidance schemes. In addition, the bill will set out a targeted anti-avoidance rule (TAAR) to prevent block false employment by offshore employment agencies and employment intermediaries.
Pensions tax bill
“My government’s pension reforms will also allow for innovation in the private pensions market to give greater control to employees, extend the ISA and Premium Bond schemes and abolish the savers’ 10p tax rate,” the Queen said in her speech on Wednesday morning.
The main elements of the bill were presented at Budget time, and will give individuals the right to withdraw funds from their defined contribution pension savings, subject to taxation at their marginal rate. These rights will be accompanied by anti-avoidance provisions, to prevent individuals taking advantage of the new flexible arrangements for tax avoidance purposes.
This bill will be accompanied by a companion pensions bill creating a new legislative framework and definitions for different categories of pension scheme.
Serious crime bill
As well as targeting child abuse, cybercrime and drug dealers, the Proceeds of Crime Act 2002 will be amended to make it easier for the authorities to to recover criminal assets. A package of measures to disrupt serious organised crime will include extension to the scope of serious crime prevention orders and gang injunctions, a new criminal offence with a maximum sentence of five years for people - including accountants - who knowingly participate in an organised crime group.
Small business, enterprise and employment Bill
To help make it easier for small businesses to access finance the bill will pave the way for smaller firms to gain fair access to the £230bn spent annually on public procurement contracts.
A separate section will enact the register of beneficial ownership and strengthen rules on director disqualifications and reform insolvency law to reduce costs.
Employment laws will be introduced to cut down abuses around the national minimum wage and zero hours contracts. A new Statutory Code and independent Adjudicator will be created to ensure that the landlords of around the national minimum wage will be strengthened so that landlords of 20,000 or so tied pubs across England and Wales publicans are treated fairly.
Scotland Act 2012 – transfer of tax powers
Ahead of the big independence vote this September, the Queen’s speech reminded the public that the Scotland Act 2012 is already transferring fiscal responsibility north of the border. From April 2015, UK Stamp Duty Land Tax and Landfill tax will no longer apply in Scotland and the Scottish Parliament will introduce new Scottish taxes to replace them. From April 2016, the Scottish Parliament will be able to set Scotland’s own rate of income tax.
Ministers will also bring forward legislation giving the National Assembly for Wales and Welsh Ministers more power over taxation and investment.