Accounting News Report – September 2016
March 13, 2017
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Tax & accounting highlights for October 2016

Here is our regular accounting and tax bulletin. Below we have compiled some of the leading highlights for October 2016 but before we dip into it we’d like to remind those of you falling under the self–assessment regime that if you’re filing your 2015/16 self-assessment tax return on paper, the deadline to do that is October 31st. However you still have time until January 31st to submit your tax return electronically. We encourage you to contact us immediately should you need urgent assistance with your self-assessment tax return.

Summary of contents

  • The Finance Bill 2016 has received Royal Assent
  • Consultation on termination payments
  • HMRC launches a new online disclosure service for agents
  • Update on lifetime ISA guidance

Finance Bill 2016 has received Royal Assent

Finance Bill 2016 has finally received Royal Assent on the 15th of September and enactedthe proposals announced in Budget 2016 and also in Summer Budget 2015 and Autumn Statement 2015. Finance Act 2016 includes provisions related to income tax rates & allowances and also restrictions on tax reliefs for subsistence expenses or business travel (effective from April 2016), as well as a reduction of the lifetime allowance on pension contributions which is now decreased from £1.25m to £1m (comes in effect from 6 April 2016). There’ll be also adecrease in the main rate of corporation tax to 17% for fiscal year 2020.

Consultation on termination payments

The Office for Tax Simplification is running consultations on suggested changes to the treatment of termination payments for tax and National Insurance Contributions.

Currently the rules that govern termination payments are complicated and are sometimes subject to manipulation by employers availing of the employer NIC exemption. Those employers are trying to change the nature of payments in order to make them exempt termination payments, whereas actually they should be subject to tax and National Insurance Contributions.

HMRC launches a new online disclosure service for agents

In cases wheretheir clients have failed to report all income and gains, it’s now possible for the tax advisers and preparers to use a new service available online in order to make a disclosure to HMRC. To use the service the agents need to register and log on to it or alternatively to set up a Government Gateway account. It’s possible to simply complete a form online and then to print and post it to HMRC.

Update on lifetime ISA guidance

HM Treasury has released an update on its factsheet concerning the new Lifetime Individual Savings Account (ISA), which should be launching in April next year.

Here’s a summary of the key features of this new ISA:

  • The accounts are available to investors aged 18 – 40.
  • Savings invested in the account prior to the age 50 attract a 25% government bonus.
  • The maximum amount that can be saved each year is £4,000. The 25% bonus that will be paid is equal to a maximum of £1,000 per year.
  • It’s possible to use some or all of the funds to buy a primary residence, or alternatively the money can be saved until the investor reaches the ageof 60.

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