S&W Sessions are a regular series of thought provoking hot topic webinars that are relevant to your business.
This session will discuss the upcoming Budget. Given that this will be the last Budget before the UK leaves the European Union, we are expecting some interesting announcements from the Chancellor. Please join our expert speakers for an analysis of the main features of the 2018 Budget and a reflection on what the announcements really mean for businesses.
The webinar will touch upon the following:
- Impact on corporation taxes
- VAT changes
- Changes to employment taxes relevant to businesses - with a special focus on IR35 should it feature
- Key takeaways
- How can we help?
Who should view the webinar?
- All in-house tax professionals, FD’s, FC’s, C-Suite
- We hope you can join us on 7 November but if you are unable to, if you register anyway we can send you the recording.
Corporate Taxes - Capital Allowances
- The Annual Investment Allowance will be increased from £200,000 to £1m for two years from 1 January 2019
- The Structural Business Allowance will provide a 2% capital allowance on the cost of any new non-residential structures and buildings
- The special rate of writing down allowances for qualifying plant and machinery will reduce from 8% to 6% from April 2019
Corporate Taxes - Digital Services Tax
- A new 2% tax on revenues of global digital companies from April 2020
- Applies to search engines, social media platforms and online marketplaces
- Not a tax on online sales of goods, online advertising or the collection of data
- There are two financial thresholds: global revenues from in-scope activities must be at least £500m a year and the first £25m of relevant UK revenues are also not taxable
- DST will be an allowable expense for UK corporation tax purposes under ordinary principles
Corporate Taxes - Innovation
A priority for the Chancellor in his 2018 Budget
1. Reform of the intangible fixed asset regime:
- Partial reinstatement of relief for acquired goodwill in business acquisitions from April 2019
- Removal of de-grouping charge
2. R&D tax credit cap for Small and Medium Enterprises for accounting periods beginning on or after April 2020
Corporate Taxes - Other highlights
- Carried-forward capital loss relief will be restricted to 50% of capital gains
- The government will legislate changes to the permanent establishment definition which prevent companies from avoiding UK corporation tax by artificially fragmenting their business activities
- Corporate non-resident landlords will come within corporation tax from April 2020
- The Enterprise Investment Scheme rules for approved funds will be amended to focus on knowledge-intensive companies
Employment Taxes – off-payroll working
- Extension of IR35 rules to place many more obligations on engagers
- Requirement to carry out status assessments
- Obligations to withhold PAYE and pay NICs
- Effective date delayed until 6 April 2020
- Exemption for “Small Companies”
- Consultation on legislative details due in Summer 2019
Employment Taxes – Short Term Business Visitors
- Relaxation of strict monthly payroll and withholding requirements under RTI for some overseas visitors
- Reporting required but no PAYE; or
- Special PAYE arrangement – single aggregate yearly PAYE payment
- Changes to special PAYE arrangement effective from 6 April 2019
- 60 day maximum to qualify (up from 30 days); and
- Payment deadline extended to 30 May
- No extra relaxation for visitors from overseas branches
Employment Taxes – Entrepreneurs’ Relief and EMI
- Tightening of rules to qualify for Entrepreneurs’ Relief
- Requirements which have changed are:
- Increase in holding period from 1 year to 2 years
- Changes to the “personal company” requirement to tighten 5% shareholding requirement
Effect on EMI schemes:
- 2 year period will apply to disposals of EMI shares on or after 6 April 2019
- “Personal company” requirements do not affect EMI shares
Employment Taxes – other announcements
- Employment Allowance restricted to only smaller businesses
- £3,000 reduction in total employers’ NIC liability
- From 6 April 2020 total employers’ National Insurance Contributions for previous tax year must be <£100,000 to qualify
- Intention to legislate on changes to National Insurance on termination payments to be effective from 6 April 2020
- Expectation that excess over £30,000 will be subject to employers’ but not employees’ NICs
VAT Registration threshold
£85K threshold – here to stay until April 2022
- From 1 April 2019, non-corporate entities can join a UK VAT group.
- Updating the definition of “bought in services” between overseas branch and a UK VAT group
- From 1 March 2019, prepayments for goods and services will be brought within the scope of VAT.
- Currently, “forfeited deposits” are VAT-free compensation e.g. a cancelled hotel room booking.
- As expected, Government will incorporate EU legislation from 1 January 2019.
- The aim is to simplify the currently complex VAT rules for vouchers and inhibit tax evasion.
- Government to become preferential creditor from 6 April 2020.
Insurance - restriction on right to recover
From 1 March 2019, anti-avoidance rules will be introduced removing benefit of VAT recovery on supplies made to non-EU brokers who make onward insurance supplies to UK individuals.
Reverse charge in construction industry
- As expected, from 1 October 2019, a domestic reverse charge will apply to construction services.
- The primary aim is to inhibit tax evasion
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