CCH Live News - Budget 2012

Budget 2012

Miscellaneous

Budget announcements

GAAR

The GAAR, which will include stamp duty land tax, will be introduced next April after a consultation this year. The Treasury said: “The government is committed to ensuring that this legislation effectively tackles artificial and abusive tax avoidance schemes and that the supporting guidance is practical both for taxpayers and for HMRC.”

Industry comment:

The Chancellor announced that he will launch a formal consultation in the summer on adopting a General Anti Abuse Rule (GAAR) similar to the one proposed by Graham Aaronson QC in his report of November 2011. It is aimed at countering "artificial and abusive tax avoidance" - an intent that few would take issue with.  There will be concerns on uncertainty for normal business transactions though because people's views differ on this highly subjective and emotive area. This is something that businesses and people with complicated tax affairs will be worried about - one person's reasonable tax planning is another person's avoidance - so the consultation period will be important.

There was an encouraging sign that the Chancellor recognises the potential for collateral damage to business and mainstream transactions when he indicated the target is the most extreme tax avoidance.  If this could be achieved, the benefits would in fact outweigh the cost of the uncertainty that it introduces.

Mary Monfries, tax policy partner, PwC

The Chancellor also surprised no one by accepting that the UK needs a General Anti Avoidance Rule (GAAR) – an all encompassing piece of legislation meant to catch and deter more aggressive tax planning. Keeping to its promise to consult further, the GAAR will now be subject to a broad consultation with a view to implementation from April 2013. It needs this input. Hard evidence from other jurisdictions that have gone the GAAR route eg Canada and Australia, shows how hard it is to formulate a rule that both clarifies what it does and doesn't cover and is practical to implement. Business will be looking closely to ensure that commercial transactions do not get bogged down in cumbersome rules and lengthy clearance procedures. Equally they will want certainty that what they do is not inadvertently caught by a GAAR and become a barrier to business in the UK.

Francesca Lagerberg, head of tax, Grant Thronton

Our clients are likely to welcome the Chancellor's desire to ensure the tax system is simple, predictable and fair. The introduction of a General Anti Avoidance Rule (GAAR) as part of next year's Finance Bill will be of interest.  Our hope is that it does not inadvertently catch reasonable, non-aggressive, tax planning. Despite much media speculation it was pleasing that after many changes in recent years that pensions tax relief appears not to have been changed again.

Dominic O'Connell, head of tax, trust & estate planning, Coutts.

Integration of income tax and national insurance

The chancellor said he would push ahead with plans to begin a detailed consultation to integrate income tax and national insurance. The government established a number of technical working groups with stakeholders to identify and explore reform options.

Originally announced at last year's budget, George Osborne said fusing the two would free businesses from having to run two different payroll tax administrations.

Budget 2012: changes and implementation dates


Personal tax

Budget changes - technical notes Commencement dates
Seed investment scheme From 6 April 2012
Enterprise Investment Scheme and Venture Capital Trusts: better focus From 6 April 2012
Enterprise Investment Scheme and Venture Capital Trusts: simplification From 6 April 2012
Enterprise Investment Scheme and Venture Capital Trusts: increases to thresholds From 6 April 2012
Reform of the taxation of non-domiciled individuals From 6 April 2012
Capital gains tax: foreign currency bank accounts From 6 April 2012
Inheritance tax nil rate band: switch to CPI From 6 April 2015
Capital gains tax: annual exempt amount From 6 April 2012
Single payment and capital gains tax roll-over relief From 1 January 2009
Tax exemptions: international military headquarters, EU forces, etc From date of Royal Assent to the Finance Bill 2012
Income tax exemption: armed forces continuity of education allowance Payments made on or after 6 April 2012
Company car tax: security enhanced cars For benefits provided on or after 6 April 2011
Taxation of non-residents: Champions League final 2013 From date of Royal Assent to the Finance Bill 2012
Qualifying time deposits: deduction of tax at source From 6 April 2012
Property loss relief against general income and post cessation property relief - anti avoidance 12 January 2012 and 13 March 2012
Grants for giving up agricultural land: repeal of relief From 6 April 2013
Luncheon vouchers: repeal of relief Vouchers provided on or after 6 Arpil 2013
Tax reserve certificates issues by HM Treasury: repeal of relief From 6 April 2013 inds, 1 April 2013 companies
Payments for the benefit of family members : repeal of relief Payments made on or After 6 April 2013
Pensions for 1947 redundancies: repeal From 6 April 2013
Deeply discounted securities: incidental expenses: repeal of relief Costs incurred on or after 6 April 2015
Life assurance premium relief: repeal Premiums due or payable from 6 April 2015
Life assurance premiums paid by employers under EFRBS: repeal of relief Payments made on or after 6 April 2015
PAYE code applied to share-based payments in certain circumstances From 6 April 2012
Closure of the simplified PAYE deduction scheme to new employers from 5/4/12 and completely on 5/4/13 New employers 6/4/12 completely 5/4/13
Real time information: improving the operation of PAYE Amended regs 6/4/12. All employees 6/10/13
Changes to National Insurance contributions legislation arising from 1 per cent increase in NICs
from 6 April 2011 and the abolition of contracting-out on a defined contribution basis
Excess refund charges from 6/4/12 re 2011/12. Contracted out
Changes to National Insurance contributions legislation regarding the information recorded on a
deductions working sheet: clarification of the ‘general earnings’ definition; and the signatory
to Class 1A returns
From 6 April 2012
Employer asset-backed pension contributions Range of dates from 6 April 2012
Income tax rates 2013-14 From 6 April 2013
Income Tax Personal Allowance for Those Aged Under 65, Basic Rate Limit and Upper Earnings Limit for 2013-14 From 6 April 2013
Income Tax: Changes to the Higher Personal Allowances for People Aged 65 to 74 and Aged 75 and Over From 6 April 2013
Enterprise Management Incentives To be announced
Child Benefit: Income Tax Charge for Those on Higher Incomes From 7 January 2013
Company Car Tax Rates From 6 April 2014
Company Car Fuel Benefit Charge From 6 April 2012
Resettlement Payments Made to Members of Parliament From 1 April 2012
Inheritance Tax: Avoidance Using Offshore Trusts From 21 March 2012
Life Insurance Policies: Income Tax Avoidance From 21 March 2012

 

Charities
Budget changes - technical notes Commencement dates
Gifts of pre-eminent objects to the nation Date to be set by Treasury order after FA 2012 receives
Royal Assent
Inheritance tax: reduced rate for estates leaving 10 per cent or more to charity In relation to deaths occurring on or after 6 April 2012
In-year repayments of income tax to charities In relation to claims made on or after 6 April 2012
Gift Aid for Charitable Companies and Community Amateur Sports Clubs From 6 April 2012
Community Amateur Sports Clubs: Registration and Gift Aid From 1 April 2010 in relation to Gift Aid and 6 April 2010 in relation to Gift Aid Claims

 

Business tax
Budget changes - technical notes Commencement dates
Controlled Foreign Companies Full Reform For the accounting period of the CFC which begins on
or after 1 January 2013
Corporation tax reform: patent box From 1 April 2013
Research and development tax relief Expenditure incurred on or after 1 April 2012
Enterprise zones: first year allowances for designated areas Expenditure incurred on or after 1/6 April 2012
Capital allowances: feed-in tariffs and the renewable heat incentive Expenditure incurred on or after 1/6 April 2012
Capital allowances: fixtures Expenditure incurred on or after 1/6 April 2012
Capital allowances: anti-avoidance rules for plant and machinery Expenditure incurred on or after 1/6 April 2013
Capital allowances - flat conversion allowances: repeal of relief Expenditure incurred on or after 1/6 April 2013
Capital allowances - safety at sports ground: repeal of relief From date of Royal Assent to the Finance Bill 2012
Improvements to the real estate investment trust regime From date of Royal Assent to the Finance Bill 2012
Tax transparent fund Chargeable periods ending on or after 1 January 2012
Bank levy amendments From 1 January 2012
Bank levy: rate change From 1 January 2013
Solvency II and the taxation of insurance companies From 1 January 2014
General insurance: claims equalisation reserves From 6 December 2011
Lloyds stop-loss insurance Transfers from the date that Finance Bill 2012 receives
Royal Assent

 

Business tax cont
Budget changes - technical notes Commencement dates
Corporation tax: distributiions in the form of assets and liabilities Periods ending on or after the date that Finance Bill 2012 receives Royal Assent
Amendments to the tax treatment of financing costs and income (debt cap) Accounts prepared after 1 January 2012
Changes to UK generally accepted accounting practice From 6 December 2011
Scope of supplementary charge From 1/6 April 2013
Mineral royalties relief: repeal Transactions on or after 1 April 2013
Harbour reorganisation schemes: corporation tax and stamp duty: repeal of reliefs From 27 February 2012 with limited retrospective application
Loan relationships - debts held by connected parties From 1 April 2013
Corporation Tax: Main Rate From 1 January 2013
Bank Levy: 2013 Rate Change From 21 March 2012
Corporation Tax: Grouping Rules From 21 March 2012
Field Allowances From a date to be confirmed
Update of the Enhanced Capital Allowance Schemes for Energy Saving and Environmentally Beneficial
(Water Efficient) Technologies
21 March 2012
Tax Avoidance: Corporate Settlor-interested Trusts 21 March 2012
Sale of Lessor Companies: Protecting Revenues 21 March 2012
Plant and Machinery Leasing: Anti-Avoidance 21 March 2012
Site Restoration Payments 21 March 2012

 

Indirect tax
Budget changes - technical notes Commencement dates
VAT: Hot Food and Premises From 1 October 2012
VAT: Sports Nutrition Drinks From 1 October 2012
VAT: Self Storage From 1 October 2012; anti-forestalling legislation will apply to supplies made on for after 21 March 2012
VAT: Approved Alterations to Listed Buildings From 1 October 2012; transitional arrangements to protect contracts entered into before 21 March 2012; anti-forestalling legislation will apply to supplies made on for after
21 March 2012
VAT: Hairdressers’ Chair Rental From 1 October 2012
VAT: Taxing Holiday Caravans From 1 October 2012
VAT: low value consignment relief From 1 April 2012
VAT: cost sharing exemption From date of Royal Assent to the Finance Bill 2012
Tackling VAT evasion on road vehicles brought into the UK During 2013 at a date to be confirmed in due course
VAT: online registration and removal of the threshold for non-UK established businesses VAT online registration and removal of cetain forms from the law, from October 2012. Removal of the registration threshold for non-UK established businesses from 1 December 2012.
VAT: grouping extra statutory concession From the date of Royal Assent to the Finance Bill 2012, and the concession will continue to apply until that date
VAT: supplies of goods or services by public bodies From date of Royal Assent to the Finance Bill 2012
Stamp duty land tax and stamp duty: relief for National Health Service bodies From date of Royal Assent to the Finance Bill 2012
Stamp duty: disclosure of tax anti-avoidance schemes From date of Royal Assent to the Finance Bill 2012
Stamp duty land tax: disadvantaged areas relief: repeal From 6 April 2013
Stamp duty: relief on certain transactions in shares: repeal of reliefs From 6 April 2013
Stamp duty: relief on certain transactions in land: repeal of reliefs From 6 April 2013
Stamp Duty Land Tax Avoidance From 21 March 2012
Stamp Duty Land Tax: 7% SDLT on property over £2m From 22 March 2012
Stamp Duty Land Tax: Enveloping of High-Value Residential Properties From 21 March 2012
Machine games duty From 1 February 2013
Gambling duties: double taxation relief From 1 April 2012
Repeal of section 22 of the Alcoholic Liquor Duties Act 1979 (ALDA) From date of Royal Assent to the Finance Bill 2012
Air passenger duty: business jets From 1 April 2013
Air passenger duty: cut in Northern Ireland rate From date of Royal Assent to the Finance Bill 2012
Carbon Price Floor: Further Legislative Provisions and Future Rates From a range of dates
Climate change levy: change to the reduced rate on electricity From 1 April 2013
Climate change levy: metal recycling processes From 1 April 2012
Climate change levy: electricity produced in combined heat and power stations From 1 April 2013
Angostura bitters: repeal of relief From 1 April 2013
Black beer: repeal of relief From 1 April 2013
Certain payments arising from a reduction in pool betting duty : repeal of reliefs For corporation tax purposes for payments made on or after
1 April 2013 and 6 April 2013 for income and inheritance tax purposes
Landfill tax: application to Scottish landed estates From 21 March 2000
Use of red diesel in privcate pleasure craft From 1 April 2012
Tobacco Products Duty Rates From 6pm 21 March 2012

 

Tax administration
Budget changes - technical notes Commencement dates
Tax agreement between the United Kingdom and Switzerland From 1 January 2013
Information powers From date of Royal Assent to the Finance Bill 2012
Tax agents: dishonest conduct From 1 April 2013
Incapacitated persons: a modern approach From 6 April 2012

 

Source: Accountancylive.com