Although the groundwork for auto-enrolment was laid in the 2008 Pensions Act, it wasn’t officially launched until October 2012 and not all employers have started the process yet, although more than 7.5 million people have already been enrolled. The government’s plan is to turn this figure into 10 million people by 2018 so that workers have something to rely on in retirement apart from the state pension. In fact, according to the Department for Work & Pensions (DWP), auto-enrolment will lead to £17bn more a year in workplace pension savings by the end of the 2019/20 tax year.
Monday, 27 March 2017
Back in January, we urged readers to prepare for the implementation of Making Tax Digital (MTD), the Government’s attempt to digitise tax returns for all business owners and the self-employed. This was due to come into effect for large businesses from next April and for small businesses the year after but now the plans have been shelved.
Why the delay?
The plans had already attracted a great deal of criticism from business groups, taxpayers and MPs and formed part of the Finance Bill 2017, the longest Finance Bill on record. However, following the announcement of the snap election in June, it was felt that there was insufficient time for the measures within MTD to be properly scrutinised before being brought into law. In fact, the schedule for the Bill was shortened, with the Committee stage debate limited to four hours and all Treasury Select Committee evidence sessions cancelled.
Therefore, after the debate, it was agreed to remove 72 out of the 135 clauses and 18 out of 29 schedules. This has reduced the residual Bill to 140 pages, an 80 per cent reduction to the 762 pages that originally made it up.
Is this a cancellation of MTD or a postponement?
Speaking during the debate, Jane Ellison, financial secretary to the Treasury made it clear that while the Government is not proceeding with a number of clauses, there has been no policy change. As she highlighted, these provisions will make a significant contribution to the public finances, so the Government will legislate for the remaining provisions at the earliest opportunity, at the start of the new Parliament.
She added that all parties agree there must be a digital future for the tax system but that there must be sufficient time for the House to consider such measures properly, as called for by the Treasury Select Committee earlier this year.
The Committee was not the only body to be vocal in its calls for a postponement; representatives from various accounting organisations, including the Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants in England and Wales (ICAEW) agreed that Making Tax Digital plans should be put to one side and not included in the forthcoming Bill.
No need to rush
As one commentator remarked, it would be unwise to rush the MTD legislation process and the other measures that were considered controversial, such as interest restriction, loss relief carry forward, an end to permanent ‘non-dom’ status and the dividend allowance reduction. All of these need to be subject to the necessary scrutiny before being passed into law.
Meanwhile, a spokesman for the CIOT said that it was wise of the Government to keep only the measures essential to maintain its revenue-raising capacity, such as renewing the provision of income tax, which has not been cut from the Bill.
So what remains in the Finance Bill 2017?
The Bill still includes changes to overseas pensions and offshore transfers, as well as the sugar drinks industry levy, commonly referred to as the sugar tax, and disguised remuneration relating to employment income provided through third parties.
Critics of MTD’s timetable said they hope that the delay in legislating for the measures will enable them to be put in statute, rather than brought in through regulations, which are subject to less scrutiny and cannot be amended.
It is likely that most, if not all, of the provisions dropped will return in a Bill after the election, regardless of which party wins. Therefore, we would still encourage firms to start making plans to digitise their record keeping.
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Tuesday, 28 February 2017
From April 2017, private and voluntary sector organisations in England, Wales and Scotland with 250 or more employees will have to publish the differences between what they pay men and women in salaries and bonuses. Failure to comply with the new legislation will constitute an “unlawful act”, meaning that the Equality and Human Rights Commission could take enforcement action. There are no published penalties for non-compliance as yet; however, this will be reviewed if levels of compliance are “not satisfactory”.
Wednesday, 21 December 2016
When it was first announced, the apprenticeship levy came under heavy fire from organisations representing British businesses. There were plenty of arguments against its introduction. The CBI warned that the levy would impose huge costs on employers with no improvement in training given. After a period of consultation and review, the scheme has been revised and agreed.
Thursday, 10 November 2016
Cloud computing is revolutionising retail, cutting costs of repairs staff, and obsolescence. When Carphone Warehouse and Dixons merged, they used the power of the Cloud to amalgamate two very different systems. Boots is using Cloud technology to enable employees to check availability of stock across all its stores.
Monday, 18 July 2016
The age of tech savvy customers is upon us. Look around you wherever you are, and you’ll see people of all ages participating in the digital transformation of their lives. Children on iPads, millennials on iPhones, and fitness bugs with health monitoring watches beeping instructions. Here in the UK, digital tech companies have been growing at a rate a third faster than the general economy. If you think you can ignore digital transformation in your business, think again.