UK Tax Round Up - July 2017

UK TAX NEWS AND DEVELOPMENTS

Conservative legislative agenda set out in Queen's Speech

Following the UK general election on 8 June 2017, at which the Conservative party won the largest number of seats but lost its overall majority, the Queen's Speech setting out the now minority Conservative government's legislative programme for the next two years was passed by Parliament on 29 June 2017. As expected, some of the less popular Conservative manifesto pledges were omitted but 27 bills were still proposed (of which eight relate to Brexit).

From a tax perspective, the following are of particular significance:

Customs Bill: the implementation of legislation to enable the UK to have standalone VAT and customs and excise regimes after Brexit. Some provisions are likely to depend on whether the UK will stay in the EU customs union. National Insurance Contributions Bill: the implementation of legislation previously in the draft Finance Bill 2017 abolishing self-employed Class 2 NICs and reforming Class 4 NICs to include self-employed individuals. These provisions were only removed from Finance Bill (No. 2) 2017 when the snap election was called. It is considered very unlikely that the controversial proposed increase to NICs for self-employed individuals from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019 will be legislated for. Finance Bill (or Bills): it is understood that one or more later Finance Bills will include a range of measures including new tax avoidance provisions and other matters in relation to the EU and Brexit. The Government has announced that the Summer Finance Bill 2017 will be published after Parliament's summer recess. This will include the provisions which were withdrawn from Finance Bill (No. 2) 2017 (see April and May 2017 Tax Round Up for further details) and those provisions will have effect from the dates originally announced.

New corporate offence of failure to prevent tax evasion to come into effect on 30 September

The effective date of the new corporate offence of failure to prevent tax evasion has been confirmed as 30 September pursuant to a statutory instrument.

Liability for this new offence is strict; however, there is a defence available if it can be shown that an organisation has reasonable procedures to prevent the facilitation of the underlying tax evasion offences in place. It is expected that over the coming weeks many firms will be reviewing their internal procedures and policies to ensure that they are in a position to meet the reasonable procedures standard by 30 September.

OTS report on...