Weekly Tax Update - Monday 26 October 2015

1. General news

   1.1 Finance Bill 2016 draft clauses to be published on 9 December 2015

   In a written statement Mr David Gauke, the Financial Secretary to the Treasury, has announced that draft clauses to be included in Finance Bill 2016 will be published on Wednesday 9 December 2015. That day will also see the publication of responses to policy consultations, explanatory notes, tax information and impact notes and other accompanying documents. The consultation on the draft legislation will be open until Wednesday 3 February 2016.

   www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2015-10-22/HCWS265#

   1.2 Justice Secretary mulls lawyers' levy further

   On Thursday 22 October, The Times reported again on the plans for a lawyers' levy on turnover, to hit the top 100 corporate law firms. It is estimated that this could raise £190m. The idea had previously been aired by Mr Gove in June. This is as a response to the perceived need to replace the current funding of the criminal courts system through charges on guilty defendants and not to fund this as other public services through general taxation. The tax or levy would be payable by firms irrespective of the amount of criminal court work carried out.

   www.thetimes.co.uk/tto/law/article4592571.ece (paywall)

2. Private client

   2.1 The Scottish rate of income tax (consequential amendments)

   Amendments have been made to the income taxes acts in consequence of the power of the Scottish Parliament to set a Scottish rate of income tax (SRIT), which can come into force from April 2016. The changes will give wider effect to the SRIT from the date of its introduction, to areas such as pension contributions and gift aid, where it had originally been agreed following consultation that, at least for a temporary period, it would be administratively easier to use the rest of the UK (rUK) basic rate.

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   The amendments include:

   Income tax relief at source for contributions to a registered pension

   Finance Act 2004 (FA 2004) has been amended so that the basic rate of tax added to the 'net of tax' pension contribution by the scheme, by way of a claim from HMRC, may be at the Scottish basic rate. As the use of the use of the Scottish basic rate is dependent on the scheme administrator being so notified by HMRC, it will be interesting to see how this will work in practice. It appears that the administrator will be able to use legitimately the rUK rate until told otherwise.

   If the rate advised to the pension administrator subsequently varies, the administrator will not need to make retrospective adjustments.

   So far as the pension scheme is concerned, new sections 192A and 192B in FA 2004...