The Government is reminding ‘stressed out parents’ that help may be available for childcare costs during the summer holidays. According to a YouGov poll, 31% of parents feel stressed trying to arrange childcare for the school holidays.

The poll, for HMRC, also found that around 30% of parents worried about balancing their job and school holiday childcare. With 54% admitting they look forward to their children returning to school in September.

HMRC is reminding working parents with summer childcare costs, that they can use Tax-Free Childcare (TFC), which is worth up to £2,000 per child per year, to pay for regulated holiday clubs during the school holidays. Parents are advised that it is possible to pay into their account regularly and ‘save up’ their TFC allowance and use it for childcare during school holidays.

Internet link: GOV.UK news

The Bank of England has raised the interest rate from 0.5% to 0.75%. The quarter of a percentage point rise sets the rate at its highest level since March 2009.

The rise in the interest rate will no doubt increase the interest costs of residential mortgages that have variable or tracker rates. It will be interesting to see if the rise in the rate is passed on to savers.

In response to the increase in the rate Alpesh Paleja, CBI Principal Economist, said:

‘This decision was in line with our expectations. The case for another rate rise has been building, with inflationary pressures being stoked by a tight labour market and many indicators now suggesting that weak activity in the first quarter of 2018 was a blip.’

The Monetary Policy Committee has signalled further rate rises over the next few years, if the economy evolves as they expect. These are likely to be very slow and limited, particularly over the next year as uncertainty around Brexit takes its toll on business investment.’

Internet links: BBC news  CBI news

First-time buyers in Scotland will be helped to purchase their first home through a new tax relief which applies to Scottish Land and Buildings Transaction Tax (LBTT).

According to the Scottish Parliament approximately 80% of first-time buyers will pay no LBTT once the LBTT First Time Buyer relief takes effect. The change sees the zero-rated LBTT threshold raised to £175,000 for first-time buyers. Those purchasing property at a higher value will have their tax reduced by a maximum of £600. The Scottish Parliament expect that around 12,000 first-time buyers will benefit each year.

Minister designate for Public Finance and Digital Economy Kate Forbes said:

‘From today, around 80% of first-time buyers will pay no LBTT, helping thousands of people across the country buy their first home.’

Internet link: GOV.SCOT news

The government has published draft legislation for Finance Bill 2018-19 which is currently open for consultation, and ‘continues the government’s commitment to a competitive and fair tax system’.

The draft legislation could affect a range of taxes, from Stamp Duty Land Tax (SDLT) to income tax.

The draft legislation also outlines the government’s approach to the Making Tax Digital (MTD) penalty system, with HMRC outlining its intention to utilise a two-tier penalty model for businesses and individuals who fail to pay their tax on time.

The July publication of the Finance Bill 2018-19 draft legislation forms part of the government’s new fiscal timetable.

The consultation on the draft legislation will run until 31 August 2018. The final contents of ‘Finance Bill 2018-19’ will be subject to confirmation at Budget 2018, expected later this year in November.

We will keep you informed of developments.

Internet link: GOV.UK finance bill 2018-19

It has previously been reported that the Enterprise Management Incentive scheme State Aid approval lapsed on 6 April 2018. HMRC had previously warned that EMI share options granted in the period from 7 April 2018 until EU State Aid approval was received may not be eligible for the tax advantages afforded to option holders but have now confirmed the scheme will operate as before.

On 15 May EU approval was granted and HMRC has now confirmed that the Enterprise Management Incentives scheme will continue to operate as before and no changes have therefore been made to the scheme.

The Enterprise Management Incentive (EMI) allows selected employees (often key to the employer) to be given the opportunity to acquire a significant number of shares in their employer through the issue of options. An EMI can offer significant tax advantages as the scheme allows options to be granted to employees which then allows shares to be acquired without any tax bill arising until the shares are sold.

Internet link: GOV.UK bulletin