ICAEW - Member firm

Registered to carry on Audit Work in the UK and regulated for a range of Investment Business Activities by The Institute of Chartered Accountants in England and Wales
Home Page

AND CHANGES FOR 2017/2018 previously announced
(Subject to details in the Finance Bill)
Ellis Atkins have taken all due care in the presentation of these notes. No responsibility for loss occasioned to any person or company acting or refraining from action as a result of any material in these notes can be accepted by Ellis Atkins, its partners or staff. Please contact us or your own professional advisor for advice specific to your circumstances.

Off payroll working in the public sector - from April 2017 the responsibility for deciding if the off-payroll rules for engagements in the public sector apply will rest with the relevant public sector body, agency or third party.

This measure will make the public sector organisation responsible for deducting and paying over any tax or national insurance contributions to HM Revenue & Customs in respect of any individuals providing services to them via their own limited company.

Employment and Benefits in Kind – 6th July following the end of the tax year will be the date when individuals will have to ‘make good’ on benefits in kind received if they wish no benefit in kind charge to apply.

Optional remuneration arrangements e.g. Salary sacrifice schemes – From 6 April 2017 income tax and national insurance advantages in regard to the provision of benefits in kind will be withdrawn. A transitional rule will apply where contractual arrangements changed prior to 6 April 2017, until the earlier of a variation or renewal of the contract, or 6 April 2018 except in relation to cars with emissions above 75g CO2 per kg, accommodation and school fees when the final date is 6 April 2021.

Reform of Termination payments

From 6th April 2018 the tax treatment of termination payments will be tightened and clarified. This will include making all contractual and non-contractual payments in lieu of notice taxable as earnings and requiring employers to tax the equivalent of an employee’s basic pay if notice is not worked. Legislation will also be introduced to align tax and employer NICs treatment of termination payments so that the employer NICs will be payable on the elements of termination payment exceeding £30,000 on which Income Tax is due. (The first £30,000 of a termination payments will remain exempt from Income tax and NICs).

Disguised remuneration avoidance schemes

A new tax charge will be raised on disguised remuneration loans made after 5 April 1999 and which remain outstanding as at 5 April 2019. In addition legislation will also be introduced to prevent employers claiming a deduction when computing their taxable profits for contributions to a disguised remuneration scheme unless tax and NIC are paid within a specified period. This will have effect for contributions made on or after 1 April 2017.

The Apprenticeship levy will come into effect in April 2017 on all UK Employers with an annual salary bill of £3 million or more. The Levy will be at a rate of 0.5% of an employer’s salary bill, but an employer will receive a £15,000 allowance to offset against the levy.

Simplified Cash basis - From April 2017, self-employed individuals and partnerships who have income of £150,000 or less a year will be given the choice to use the simplified cash basis where they account for income when received and expenses when paid. For Universal Credit claimants the entry threshold will be increased to £300,000. The exit threshold for all users will be £300,000.

Offshore property developers – all relevant profits, either trading or in regard to developing land in the UK, will be fully taxable on or after 8 March 2017.

Research and Development Expenditure Credit Claims - new administrative changes will be made to Research and Development Expenditure Credit claims in order to simplify the claim process.