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News - January
Capital Gains Tax Reform
The proposed changes announced in the Pre-Budget Report to the capital gains tax (CGT) system are radical. Taper relief for CGT will be abolished for disposals on or after 6 April 2008. Other changes to the CGT system include introducing a flat rate of CGT of 18% and abolishing indexation, an allowance for inflation.
Advisory Fuel Rates
To reflect the increases in fuel prices, HMRC have issued new advisory fuel rates for company car drivers. These take effect for all journeys undertaken from 1 January 2008 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.
Proposed cuts in ‘red tape’
As you are no doubt aware the system of tax reliefs on expenditure on equipment in your business is a complex one. Broadly when you buy a piece of equipment to use in your business you normally cannot set the full cost against that year’s profits, unless the value of the item is quite small, or a special tax relief applies. The cost of more expensive items is written off against profits over a number of years, using the capital allowances system.
Inheritance Tax Nil Rate Band
Chancellor Alistair Darling announced in his Pre-Budget speech a change to the way in which the inheritance tax (IHT) nil rate band of £300,000 can be used for married couples and civil partners.
Capital Allowances
In November’s enews we reported on proposed changes to the capital allowances system and HMRC have now issued a 91 page document including draft legislation.
Employment Bill
A new Employment Bill will, if enacted, impose tougher penalties on employers and dispute resolution procedures will be simplified. The overall effect of the Employment Bill is to strengthen and clarify key aspects of employment law. It was introduced and had its first reading on 6 December 2007 with the aim of receiving Royal Assent by summer 2008.
Consultation On Residence And Domicile
In the Pre-Budget Report the government announced a package of reforms affecting the personal tax rules on residence and domicile.
Income Shifting Consultation
You may well remember that the Arctic Systems case involved a husband and wife who owned a company 50/50 and, broadly, took the profits out by way of dividends, again 50/50.