The VAT registration and deregistration thresholds will be increased in line with inflation
From 1 April 2017 the turnover limit, beyond which compulsory registration is required, will be increased from £83,000 to £85,000.
The turnover limit below which a business may apply for deregistration will increase from £81,000 to £83,000.
The registration and deregistration threshold for businesses acquiring goods from other EU members states will also be increased from £83,000 to £85,000.
These increases are in line with the usual, annual inflationary increases.
The ‘use and enjoyment’ provisions for mobile phone services used by individuals are being withdrawn. This will ensure that UK VAT will also be applied to mobile phone use by UK residents when outside the EU, as well as when used in the EU as under the current provisions.
This change brings the UK into line with the internationally agreed approach.
It is clear that new technology will increasingly feature in combating fraud and allows the collection of VAT to move away from the traditional method and being collected directly at the point of sale.
The reduction of SDLT filing and payment time limit from 30 to 14 days will be delayed until after April 2018.
The measure is aimed at streamlining administration and payment processes for SDLT. The August 2016 consultation indicated over 31,000 paper returns being filed each year and about 30% of SDLT payments still being made by cheque. Increased on-line filing and electronic payment may be stimulated by the shorter timescales when introduced.
Representations to the August 2016 consultation from industry and professional bodies indicated there may be problems meeting the new deadline for large and complex acquisitions where HMRC currently require a large amount of additional data. It is to be hoped that refinements to the information required to accompany an SDLT return can be made so that when the measure is introduced, it is practical to comply with for all taxpayers.
New anti-forestalling measures to be introduced to ensure the 2% increase in IPT standard rate from June 2017 has effect in accordance with the policy. It has effect from 8 March 2017
As announced at Autumn Statement 2016, the standard rate of IPT will rise from 10% to 12% from 1 June 2017. There is existing anti-forestalling legislation to ensure that any increase in IPT applies from the date the changed rate is to have effect. This continues to have effect so far as it relates to premiums received on or after 23 November 2016 and before 8 March 2017. From 8 March 2017 new anti-forestalling legislation will replace the existing provisions. The new provisions are aimed at preventing businesses taking steps to avoid the rate change, that the rate increase is applied fairly, and excludes situations where any apparent forestalling is simply a consequence of the insurer’s normal commercial practice.
This measure updating and amending existing anti-forestalling legislation is an expected measure to ensure the budgeted rate increase operates as intended. It is notable that the IPT rate was 6% prior to November 2015 and so by June 2017 the rate will have doubled in less than two years, increasing the cost of many types of insurance cover purchased in the UK, such as for motor cars, houses and contents and private medical insurance. There is no change to the higher IPT rate of 20% which applies to travel insurance and some mechanical/electrical warranties.
Clarifies the tax treatment of material disposed at landfill sites in England, Wales and Northern Ireland. The new legislation will take effect from the date of Royal Assent of Finance Bill 2017.
There has been some dispute in recent years as to what constitutes a taxable disposal for landfill tax purposes. In addition it appeared that some hazardous waste was classified in such a way that lower rates of landfill tax instead of higher rates applied. Amending legislation, taking effect from the date of Royal Assent of Finance Bill 2017, will clarify that landfill tax will apply to material deposited on the surface of land or on a structure set into the surface, whether or not it is covered after being deposited, or is deposited in a cavity. The changes will also remove the requirement for landfill site operators to notify HMRC of various landfill site related activities. Exemptions from the tax will be set out in secondary legislation so landfill tax will not apply to material currently outside its scope.
These changes will apply to landfill in England, Wales and Northern Ireland, and should remove much of the uncertainty evident from disputes that have reached the Courts in recent years. Landfill tax has been devolved to Scotland and will be one of the taxes to be devolved to Wales. It is to be hoped there will be consistency in the way the similar taxes apply across the whole of the UK.