Earlier this year the Government revealed that many of the controversial provisions within its Finance Bill would be abandoned ahead of the snap general election, held in June, to ensure a trouble-free passage to Royal Assent.
Making Tax Digital (MTD), plus several other flagship proposals, subsequently fell by the wayside, creating a great deal of uncertainty for many businesses and individuals.
However, many of the provisions previously abandoned have been reinstated within the Finance Bill 2017-19, which was published in draft form back in September. Those proposals that did make the cut include:
- changes to the tax regime for non-domiciled individuals, including the requirement that they should have lived here for 15, instead of 17, of the last 20 years to claim UK resident status;
- a cut in the Money Purchase Annual Allowance from £10,000 to £4,000 for people who have accessed their pensions flexibly;
- the introduction of a £500 financial advice allowance, enabling savers to access £500 tax-free from their pension pots to pay for regulated financial advice; and
- from April 2018, a reduction in the tax-free Dividend Allowance from £5,000 to £2,000.
In respect of MTD, it was prior to the release of the draft Finance Bill that the Government offered businesses some clarity as it announced a whole new timetable for proceedings. Consequently, 3m of the smallest businesses and landlords will now transition to the new digital system at a pace suited to them. Read our previous article for more details about the new schedule and our reaction to the turnaround, here.
Shortly after the draft Finance Bill was issued however, the waters muddied once more with the publication of a consultation on draft legislation to be included in the next Finance Bill – the Finance Bill 2017-18 – the final contents of which will be announced at the Autumn Budget on 22 November.
So, as we count down to the Autumn Budget, it remains to be seen whether the Chancellor will deliver on his promise of transparency and a fairer economy for all, or whether his announcements will only do more to exacerbate the ambiguity that many businesses are still struggling with. We will have to wait and see…
Click here to read this month’s article on the upcoming Autumn Budget.