This year’s Finance Bill received Royal Assent on 22 July 2020 and will now pass into law as the Finance Act 2020. There are a lot of new items, here are the headlines:
Loan Charge (Disguised Remuneration)
Possible repayments for existing settlements can now start to be made for tax years that HMRC will no longer pursue under the Loan Charge rules following the last few years of representations and reviews. HMRC will write to everyone it thinks is due a repayment over the next few months and all forms have to be sent back to HMRC by 30 September 2020. The grounds for refunds or waivers can be complex and IHT may still be due. Please get in touch if you need assistance.
Hidden Economy – Contingent Licencing
Draft legislation has been issued with the intention that certain trade licence renewals will require proof of tax registration. Initially this is intended to apply to taxi and personal hire vehicle drivers and businesses and scrap metal dealers and mobile collectors. If this is successful it could be extended to other sectors.
There will be no benefit in kind charge for employees having the private use of zero CO2 emission vans from April 2021.
Making Tax Digital (‘MTD’)
MTD will be extended as follows:
- From April 2022, MTD will apply to all VAT-registered business (currently it only to businesses with a turnover over the VAT threshold)
- From April 2023, businesses and landlords liable for Income Tax, with business income over £10,000 per annum, will need to keep digital records and use software to update HMRC quarterly through MTD. They can register to join a pilot scheme from April 2021 and the long warning time is to allow software providers to develop the tools.