Submissions archive - 2017

We have continued our engagement with HMRC regarding the proposed changes to the FRS and submitted our comments and concerns to HMRC.

Clause 9 of the draft Finance Bill 2017 makes a number of changes (i) to narrow the scope of the exemption for termination payments so that non-contractual PILONs, will be taxable (to the extent equating to basic pay), (ii) Foreign Service Relief (FSR) is essentially abolished (save for seafarers) and (iii) it is clarified that the exemption for injury payments does not apply in cases of injured feelings. In addition, the NIC draft clauses ensure that all PILONs are also subject to Class 1 NICs and makes an employer liable to pay employer NICs on the amount of a termination payment that exceeds the £30,000 income tax exemption. These amendments have effect from 2018/2019 onwards.

In addition to raising concerns around some aspects of the detail of the proposed new rules, the CIOT tackled the implementation of the new rules for a corporate interest restriction, saying that the legislation has been rushed through without sufficient time for full consideration.  

The CIOT responded to the House of Lords call for evidence on the delegation of powers as part of the legislative process, particularly in the context of Brexit.

The proposed new rules reforming the treatment of corporation tax losses go beyond the stated policy aim and place unnecessary burdens on taxpayers.  

The CIOT comments sent to HMRC on Draft FB17 Clause 13: Life Insurance Policies.

In our response to the consultation document, we welcome the fact that HMRC have chosen to consult on the future of the advance assurance service in advance of making significant changes to the service, but we are concerned that the consultation is not addressing the root causes of why demand for the service is increasing so much.

The draft legislation in clause 91 follows a consultation document “Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document” issued on 17 August 2016.  The response document issued on 5 December 2016 referred to modifying the existing penalty regime for users of tax avoidance, “so that penalties are chargeable when complex tax avoidance arrangements are defeated”. HMRC state in the explanatory notes to the draft legislation that the aim of the clause is to act as a disincentive to entering into tax avoidance.

The CIOT has submitted a response on clause 18 of the draft FB 2017 provisions setting out changes to business investment relief (BIR).

On 5 December the Government published a response to the further consultation on the reforms to the taxation of non-domiciles issued in August 2016, together with draft clause 42 and Schedule 13 for Finance Bill 2017 to introduce an inheritance tax (IHT) charge where UK residential property is held in offshore structures.