The government has confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows:
The government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. However, it will remain at 20% indefinitely until the economic conditions allow and a change is affordable. The government also announced a plan to abolish the 45% additional rate of income tax from April 2023, which was later scrapped. From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140.
Victoria Atkins, Financial Secretary to the Treasury announced this week that plans to introduce Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) will be pushed back to April 2026, a two-year delay on the planned implementation of April 2024.
MTD ITSA will now be mandatory for businesses from April 2026. However, this will only apply to those businesses, self-employed individuals and landlords who have income above £50,000. Businesses with income over £30,000 will be mandated to comply with MTD ITSA from April 2027.
The government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. It will inform the approach for any further roll out of MTD for ITSA after April 2027.
MTD for ITSA will not be extended to general partnerships in 2025 as previously announced.
Where a taxpayer falls into the MTD ITSA regime, they will need to keep digital records and submit quarterly reports to HMRC as well as complete a year-end reconciliation and update process which broadly equates to the current self-assessment tax return filing.
The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This was to be accelerated so that it took effect from April 2023. However, whilst the government aims to proceed with the cut in due course, this will only take place when economic conditions allow and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely.
At the Mini Budget on 23 September 2022 the government announced a plan to abolish the 45% additional rate of income tax from April 2023. It was announced on 3 October 2022 that the government would not proceed with this plan.
From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140.
The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK.
The income tax personal allowance and higher rate threshold were already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028. They will be £12,570 and £50,270 respectively.
The government will uprate the married couple’s allowance and blind person’s allowance by inflation for 2023/24.
The government has also confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows:
As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%.
In addition, the government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
These changes will apply to the whole of the UK.
In September 2021 the government published its proposals for new investment in health and social care in England. The proposals were intended to lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government introduced a UK-wide 1.25% Health and Social Care Levy based on the National Insurance contributions (NICs) system but ringfenced for health and social care.
The Health and Social Care Levy Act provided for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates were intended to revert back to 2021/22 levels and be replaced by a new 1.25% Health and Social Care Levy.
However, the government has:
Comment |
| According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year.
For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24. In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year.
|
The changes took effect for payments of earnings made on or after 6 November 2022, so:
The effect on Class 1A (payable by employers on taxable benefits in kind) and Class 1B (payable by employers on PAYE Settlement Agreements) NICs will effectively be averaged over the 2022/23 tax year, so that the rate will generally be 14.53%.
Comment |
| The government hopes that most employees will receive the NICs reduction directly via the payroll in their November pay but acknowledges that some will have to wait until December or January, depending on the complexity of their employer’s payroll software. |
Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.
A similar principle to that outlined above for income tax thresholds will be followed in respect of the NICs upper earnings limit and upper profits limit. From July 2022, the NICs primary threshold and lower profits limit were increased to align with the personal allowance and will be maintained at this level from April 2023 until April 2028. The Class 2 lower profits threshold will also be fixed from April 2023 until April 2028 to align with the lower profits limit. They will again be £12,570 and £50,270 as appropriate.
In addition, the government will fix the lower earnings limit and the small profits threshold at 2022/23 levels in 2023/24, namely £6,396 and £6,725 per annum respectively.
The government will uprate the Class 2 and Class 3 NICs rates for 2023/24 to £3.45 per week and £17.45 respectively.
Finally, the government will fix the level at which employers start to pay Class 1 NICs for their employees at £9,100 from April 2023 until April 2028.
Comment |
| The government states: ‘It is fair that businesses play their part in reducing the UK’s debt. The Employment Allowance means that 40% of businesses do not pay NICs and will be unaffected by this change, and the largest employers contribute the most.’ |
The government has announced that the capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.
Comment |
| Combined with the changes to the Dividend Allowance, these measures will raise over £1.2 billion a year from April 2025. |
The inheritance tax nil-rate bands are already set at current levels until April 2026 and will stay fixed at these levels for a further two years until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million.
A number of changes were made to the Stamp Duty Land Tax (SDLT) regime earlier this year and these remain. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT.
The residential nil rate tax threshold increased from £125,000 to £250,000.
The nil rate threshold for First Time Buyers’ Relief increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief increased to £625,000.
The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes.
There are no changes in relation to purchases of non-residential property.
| Residential
Band £ |
Rate
% |
Non-residential
Band £ |
Rate
% |
| 0 – 250,000 | 0 | 0 – 150,000 | 0 |
| 250,001 – 925,000 | 5 | 150,001 – 250,000 | 2 |
| 925,001 – 1,500,000 | 10 | Over 250,000 | 5 |
| Over 1,500,000 | 12 |
Higher rates may be payable where further residential properties are acquired.
Comment |
| However, the government has now confirmed that these changes will be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market. |
The Welsh government also altered its rates in relation to land and buildings in Wales for transactions with an effective date on or after 10 October 2022.
| Residential
Band £ |
Rate
% |
Non-residential
Band £ |
Rate
% |
| 0 – 225,000 | 0 | 0 – 225,000 | 0 |
| 225,001 – 400,000 | 6 | 225,001 – 250,000 | 1 |
| 400,001 – 750,000 | 7.5 | 250,001 – 1,000,000 | 5 |
| 750,001 – 1,500,000 | 10 | Over 1,000,000 | 6 |
| Over 1,500,000 | 12 |
Higher rates may be payable where further residential properties are acquired.
It had been previously announced that the expected increase in the rate of corporation tax for many companies from April 2023 to 25% would not go ahead. However the government announced on 14 October 2022 that this increase will now proceed and this has been confirmed.
This means that, from April 2023, the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate.
In addition:
The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur.
Up to 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from capital allowances, generally referred to as ‘super-deductions’. These reliefs are not available for unincorporated businesses.
Comment |
| Companies incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. |
The government will also extend the 100% first year allowance for electric vehicle chargepoints to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes.
For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20% but the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%.
Comment |
| This government states that ‘this reform ensures that taxpayer support is as effective as possible, improves the competitiveness of the RDEC scheme, and is a step towards a simplified, single RDEC-like scheme for all’. The government will consult on the design of a single scheme and consider whether further support is necessary for R&D intensive SMEs. As previously announced at Autumn Budget 2021, the R&D tax reliefs will be reformed by expanding qualifying expenditure to include data and cloud costs, refocusing support towards innovation in the UK, and targeting abuse and improving compliance. |
From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000.
From April 2023, qualifying companies will be able to issue up to £60,000 of Company Share Option Plan (CSOP) options to employees, twice the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies.
The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively.
Comment |
| According to the government, at £85,000, the UK’s VAT registration threshold is more than twice as high as the EU and OECD averages. |
The government will set the rates for the taxation of company car benefits until April 2028 to provide long term certainty for taxpayers and industry. Rates will continue to incentivise the take up of electric vehicles.
In addition, from 6 April 2023 car and van fuel benefits and the van benefit charge will increase in line with inflation.
Comment |
| In addition, from April 2025 electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles. According to the government, this will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate. |
The government will provide households on means-tested benefits with an additional £900 cost of living payment in 2023/24. Pensioner households will receive an additional £300 and individuals on disability benefits will receive an additional £150.
The government will increase benefits in line with inflation, including the state pension. The standard minimum income guarantee in pension credit will also increase in line with inflation from April 2023.
Comment |
| Around 19 million families will see their benefit payments increase from April 2023. |
The benefit cap will be raised in line with inflation, so that more households will see their payments increase as a result of uprating from April 2023. The cap will be raised from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 in Greater London. For single adults it will be raised from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London.
The government will increase the National Living Wage (NLW) and National Minimum Wage from 1 April 2023 as follows:
Comment |
| This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million low paid workers. |
The government will bring forward the nationwide rollout of the In-Work Progression Offer, starting with a phased rollout from September 2023, to support individuals on Universal Credit (UC) and in work to increase their earnings and move off benefits entirely. This will mean that over 600,000 claimants on UC whose household income is typically between the equivalent of 15 and 35 hours a week at the NLW will be required to meet with a dedicated work coach in a Jobcentre Plus to increase their hours or earnings.
The Autumn Statement sets out reforms to ensure businesses in the energy sector who are making extraordinary profits contribute more. From 1 January 2023, the Energy Profits Levy will be increased to 35% and extended to the end of March 2028 and a new, temporary 45% Electricity Generator Levy will be applied on the extraordinary returns being made by electricity generators.
The Energy Price Guarantee (EPG) will be maintained through the winter, limiting typical energy bills to £2,500 per year. From April 2023 the EPG will rise to £3,000.
The government is also setting a national ambition to reduce energy consumption by 15% by 2030, delivered through public and private investment, and a range of cost-free and low-cost steps to reduce energy demand.
Three weeks later, after huge turmoil, a reversal of most of the elements of that plan and a new statement planned for 31 October. This is now being referred to as the Medium-Term Fiscal Plan, where the Chancellor will publish the government’s fiscal rules alongside an Office for Budget Responsibility forecast, together with what are described as ‘further measures’.
The changes outlined on 17 October are designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline. Below, we have outlined the current position.
In September 2021 the government published its proposals for new investment in health and social care in England. The proposals were intended to lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government introduced a UK-wide 1.25% Health and Social Care Levy based on the National Insurance contributions (NICs) system but ringfenced for health and social care.
The Health and Social Care Levy Act provided for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates were intended to revert back to 2021/22 levels and be replaced by a new 1.25% Health and Social Care Levy.
However, the government has confirmed that it will:
Comment |
| According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year.
For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24.
In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year.
|
The changes take effect for payments of earnings made on or after 6 November 2022, so:
The effect on Class 1A (payable by employers on taxable benefits in kind) and Class 1B (payable by employers on PAYE Settlement Agreements) NICs will effectively be averaged over the 2022/23 tax year, so that the rate will generally be 14.53%.
Comment |
| The government hopes that most employees will receive the NICs reduction directly via the payroll in their November pay but acknowledges that some will have to wait until December or January, depending on the complexity of their employer’s payroll software. |
Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.
The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This was to be accelerated so that it took effect from April 2023. However, whilst the government aims to proceed with the cut in due course, this will only take place when economic conditions allow and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely.
At the Mini Budget on 23 September the government announced a plan to abolish the 45% additional rate of income tax from April 2023. However, it was announced on 3 October that the government would not proceed with the abolition of the 45p tax rate.
The government has also confirmed that, from April 2023, the 1.25% proposed reduction in rates of taxation will not proceed, meaning that the rates will stay as follows:
As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%.
These changes will apply in Scotland and Wales as the rules on dividends apply to the whole of the UK.
It had been previously announced that the expected increase in the rate of corporation tax for many companies from April 2023 to 25% would not go ahead. However the government announced on 14 October that this increase will now proceed.
This means that, from April 2023, the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate.
The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur.
Up to 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from capital allowances, generally referred to as ‘super-deductions’. These reliefs are not available for unincorporated businesses. Interestingly, these allowances were not mentioned in any statement, other than minor amendments to the current rules, so it appears the scheduled withdrawal of them will occur in 2023.
Comment |
| Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. |
From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000.
From April 2023, qualifying companies will be able to issue up to £60,000 of Company Share Option Plan (CSOP) options to employees, twice the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies.
A number of changes are made to the Stamp Duty Land Tax (SDLT) regime. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT.
The residential nil rate tax threshold is increased from £125,000 to £250,000.
The nil rate threshold for First Time Buyers’ Relief is increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief is increased to £625,000.
The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes.
There are no changes in relation to purchases of non-residential property.
| Residential Band £ |
Rate % |
Non-residential Band £ |
Rate % |
| 0 – 250,000 | 0 | 0 – 150,000 | 0 |
| 250,001 – 925,000 | 5 | 150,001 – 250,000 | 2 |
| 925,001 – 1,500,000 | 10 | Over 250,000 | 5 |
| Over 1,500,000 | 12 |
Higher rates may be payable where further residential properties are acquired.
The Welsh government has also altered its rates in relation to land and buildings in Wales for transactions with an effective date on or after 10 October 2022.
| Residential Band £ |
Rate % |
Non-residential Band £ |
Rate % |
| 0 – 225,000 | 0 | 0 – 225,000 | 0 |
| 225,001 – 400,000 | 6 | 225,001 – 250,000 | 1 |
| 400,001 – 750,000 | 7.5 | 250,001 – 1,000,000 | 5 |
| 750,001 – 1,500,000 | 10 | Over 1,000,000 | 6 |
| Over 1,500,000 | 12 |
Higher rates may be payable where further residential properties are acquired.
Over the last 20 years, there have been numerous changes to the tax system to try and address ‘disguised employment’ and to generate additional tax and NICs accordingly. In a surprise announcement, the government had stated that it would repeal the off-payroll working rules from 6 April 2023. However, it has been confirmed that this change will not go ahead and the off-payrolling rules will remain in force.
The government had announced that it would introduce a modern, digital, VAT-free shopping scheme with the aim of providing a boost to the high street and creating jobs in the retail and tourism sectors. However, this change will not go ahead either.
The government had announced that it would freeze alcohol duty rates from 1 February 2023 but this will not go ahead.
The government has announced unprecedented support to protect households and businesses from high energy prices. The Energy Price Guarantee and the Energy Bill Relief Scheme are supporting millions of households and businesses with rising energy costs and the government has stated that these schemes will continue to do so from now until April next year.
However, the government states ‘that it would be irresponsible…to continue exposing the public finances to unlimited volatility in international gas prices’.
Consequently, a Treasury-led review will be launched to consider how to support households and businesses with energy bills after April 2023. The aim is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need. The government has also stated that any support for businesses will be targeted to those most affected and that the new approach will better incentivise energy efficiency.
However, this is not the end of the story. Government departments will be asked to find efficiencies within their budgets and the Chancellor is expected to announce further changes to fiscal policy on 31 October to put the public finances on a sustainable footing.
In 2022 it is almost dangerous to ignore the significance of the world of digital assets. In the United States, up to 70% of adults do not know what a non-fungible token (NFT) is despite $41 billion worth of crypto being spent on NFT marketplaces in 2021 alone. The below article explores the US tax treatment of NFTs.
What is an NFT?
There is no NFT-specific tax guidance given by the IRS To gain an insight into how NFTs are taxed, therefore, we must first look at how cryptocurrencies are treated in terms of taxation, as both use blockchain. Based on this premise, the conclusion is that NFTs may be taxed in the same way as cryptocurrency with addition of the collectibles basket and taxed as a property, with a long-term capital gains tax rate ranging from 0% to 28%, depending on your overall tax bracket.
How are NFTs taxed in the US?
An NFT is a data unit that is digitally stored. NFTs cannot be used interchangeably because they are unique items. Therefore, they are known as ‘non-fungible’ tokens. The IRS have yet to release clear guidance on the tax status of NFT’s, thus causing confusion surrounding the taxability of NFT’s.
Taxable events involving NFTs
In summary, the nature of the transaction will determine its tax status. For example, the actual creation of an NFT is not a taxable event but once a sale transaction has been made any proceeds made will be taxable. Other transactions that may lead to a tax liability are the selling of an NFT in exchange for cryptocurrency, buying NFT’s with fungible cryptocurrency, or the exchange of one NFT for another may lead to a taxable event.
Nevertheless, if this is an area you are looking to make an investment in or even create an NFT, and want to be clear on the tax implications, please ensure you seek tax advice.
The American Taxpayer Relief Act of 2012 (ATRA) was the first piece of legislation to set a permanent estate tax and gift tax exemption (“exemption”). Initially, ATRA set the exemption at $5,000,000 per person, indexed for inflation. When the Tax Cuts and Jobs Act of 2017 (TCJA) was passed, the exemption increased to $11,180,000 per person. That amount has been annually adjusted upward for inflation, and in 2023, the new exemption amount is set to be $12,920,000 per person and $25,840,000 per married couple. This is a significant increase from the $12,060,000 ($24,120,000) amount of 2022.
The gift tax annual exclusion allows a taxpayer to gift a certain amount to a recipient each year without using any of the taxpayer’s lifetime exemption amount. In 2022, the annual exclusion amount was $16,000, or $32,000 for a married couple choosing to split gifts. For 2023, the annual exclusion amount has increased to $17,000, or $34,000 for a married couple choosing to split gifts. For example, it is expected that a married couple with four children will be able to gift $136,000 ($34,000 to each child) in 2023 without using any of their estate and gift tax exemption amounts. This means that any individual can give up to $17,000 to any other person(s) without incurring gift tax consequences or reducing their remaining exemption. Married couples can also gift‐split and effectively gift $34,000 to any donee. For example, if an individual has already used all their $12,060,000 exemption, as of January 1, 2023, 2 they could gift an additional $860,000 (utilising the increased exemption amount) and make as many $17,000 gifts to individuals as they would like without any gift tax concerns. All of these funds would also be removed from their estate for estate tax purposes.
The TCJA tax cut is set to expire at the end of 2025. Therefore, if Congress does not take action to extend the current increased exemptions, as of January 1, 2026, the exemption will revert to the ATRA level of $5,000,000, indexed for inflation.
Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule requiring certain entities to file reports with FinCEN that identify two categories of individuals — (1) beneficial owners of an entity and (2) individuals who have who have filed an application with specified governmental authorities to create the entity or register it to do business. The new regulations implement Section 6403 of the Corporate Transparency Act (CTA), enacted in 2021.
The regulation requires business entities, including corporations, limited liability companies and other legal entities formed under the laws of the United States or any foreign country that is qualified to do business within the United States, to report certain beneficial ownership information if they are considered a “reporting company”.
The CTA exempts from the definition of “reporting company” twenty-three specific types of entities.
Under 31 CFR 1010.380(a)(1), any entity that meets the definition of a “reporting company” must file a report of beneficial ownership with FinCEN.
In general terms, a beneficial owner is defined as an individual who owns or controls at least 25 percent of “the ownership interests” of the entity. There is more guidance in the final regulations including some specific exemptions.
Reporting requirements will be a providing detail relating to the beneficial owners of a reporting company, including personal identifying information (legal name, date of birth, address etc).
The effective date for these rule changes is January 1, 2024. There are specific deadlines for filing the relevant information. If you think this may affect you, please reach out to your usual Frontier contact.
Having only just come into effect, the Off-payroll working rules will be changing once again. Under the current rules it is the responsibility of the end client or fee payer to determine the tax status of the individual engaged to provide a service. The rules surrounding this have been complex and many businesses have spent the last few years investing in their practices to comply with the new rules.
One of the key announcements in the recent Mini-budget, was the repeal of the public and private sector Off-payroll working rules with effect from 6th April 2023. From this date workers providing a service via a personal service company will be responsible for determining their own tax status and paying the appropriate tax and NIC.
This will be good news for many, who have been affected by these recent changes and will minimise the risk that has impact genuine self-employed workers. It will also remove a significant compliance burden for many businesses. Organisations will now review their agreements in place with current employees and will also be thinking about the future structure of the business. However, many organisations have invested time and effort to ensure they comply with the Off-payroll working rules and may be cautious in making further changes. As we have seen – a U-turn is always a possibility. We will keep you updated on any further developments on this policy.
Currently, divorcing couples have until the end of the tax year of the year of separation to pass assets to each other. This means that after the tax year has ended, assets may only be allowed to pass between spouses and civil partners at market value which can result in Capital Gains Tax (CGT) liabilities and add an additional layer of cost and stress for separating couples.
However, new legislation, coming into effect on the 6th of April 2023, will now give divorcing couples three years to do so on a no gain/no loss basis and unlimited time if the assets are the subject of a formal divorce agreement. The new legislation allows for divorcing couples to coordinate their assets in ease and at a lesser cost.
Furthermore, under the new legislation residence relief will be extended so that spouses who keep an interest in their matrimonial home will be entitled to the relief. This will also encompass deferred charge arrangements.
Couples who divorced during the current tax year will be eligible for no gain/no loss transfers in 2021/22 under the current legislation as these changes will take effect on April 6, 2023. Couples that separated before the 6th of April 2022 will only benefit if they wait until after 6 April 2023 to transfer assets.
