Many employers help employees with childcare costs, often by providing childcare vouchers by way of salary sacrifice. Following the roll out of Tax-Free Childcare (TFC), the new government scheme to help working parents, existing Employer-Supported Childcare (ESC) schemes were expected to close to new joiners from April 2018.
However following the Chancellor’s Spring Statement, Education Secretary Damian Hinds, made a concession to delay scrapping the scheme by six-months.
The Childcare Choices website which provides useful guidance to parents on the childcare options available to them including ESC, TFC and other free entitlements has been updated to show that childcare vouchers will be available to new joiners until the end of September 2018.
Under the rules employees already using ESC can choose whether to remain in existing schemes or switch to TFC, but parents cannot be in both TFC and ESC at the same time.
Internet link: GOV.UK Childcare Choices
The regulations to bring into force Making Tax Digital for VAT (MTDfV) are now law, and digital VAT returns will be required from 1 April 2019.
MTDfV is the first phase of HMRC’s landmark Making Tax Digital (MTD) regime, which will ultimately require taxpayers to move to a fully digital tax system. Regulations have now been issued which set out the requirements for MTDfV.
Under the new rules, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software.
The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on that date, and otherwise from the first day of a taxpayer’s first prescribed accounting period beginning after 1 April 2019.
HMRC is piloting MTDfV during 2018, ahead of its introduction in April 2019. Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020, although businesses below the VAT threshold which have voluntarily registered for VAT can opt to join the scheme.
As with electronic VAT filing at present, there will be some exemptions from MTD for VAT. However, the exemption categories are tightly-drawn and unlikely to be applicable to most VAT registered businesses.
Keeping digital records will not mean businesses are mandated to use digital invoices and receipts but the actual recording of supplies made and received must be digital. It is likely that third party commercial software will be required. Software will not be available from HMRC. The use of spreadsheets will be allowed, but they will have to be combined with add-on software to meet HMRC’s requirements.
Internet link: GOV.UK statutory instrument
New data protection rules from General Data Protection Regulation (GDPR) will replace the Data Protection Act in the UK from 25 May 2018.
GDPR is designed to safeguard personal data of citizens from EU member states, with particular emphasis on transparency and accountability. It applies to all businesses in the EU and non-compliance will lead to substantial fines.
The new GDPR is a regulation which is intended to strengthen and unify data protection for all individuals within the European Union (EU). The regulation will become a law without exception in the UK from 25 May 2018. The government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the GDPR.
The government has also confirmed that the UK will replace the 1988 Data Protection Act (DPA) with legislation that mirrors GDPR, post-Brexit. This means that any business, big or small, will be required to comply with GDPR – which deals with secure collection, storage and usage of clients’ personal data.
Failure to comply with the regulation can result in heavy fines of up to €20 million or 4% of the businesses’ annual turnover (whichever is higher amount).
Internet link: ICO guide to GDPR
The Chancellor Philip Hammond presented his first Spring Statement on Tuesday 13 March 2018.
In his speech he provided an update on the economy and responded to the Office for Budget Responsibility forecasts. In addition he launched consultations on various aspects of the tax system.
Changes to the timing of tax legislation
Chancellor Philip Hammond has implemented some fundamental changes to the UK fiscal timetable.
In the 2016 Autumn Statement, the Chancellor announced that he would be introducing a new Budget timetable, which would see the main annual Budget moving from its traditional spring setting to the autumn and the Autumn Statement being replaced by a Spring Statement. The first Autumn Budget was presented in November 2017.
The new process
While the general process of developing tax policy will remain the same, the timescales for policy making and consultation have changed significantly. The government hopes that the new system will allow more time to scrutinise and consult on draft tax legislation before it is introduced.
The new timing of the Autumn Budget will allow the announcement of most new measures well in advance of the tax year in which they are due to take effect. The Spring Statement also offers the opportunity for the government to consult during the early stages of policy making, and publish calls for evidence on long-term tax policy issues.
Under the new system, measures announced in the Autumn Budget will generally be consulted on during the winter and spring, with draft legislation being published in the summer, ahead of the introduction of the Finance Bill in the winter. This will then receive Royal Assent the following spring.
Our Spring Statement 2018 summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was announced we have included our own comments. If you have any questions please do not hesitate to contact us for advice.
The Pensions Regulator has announced that the number of employers meeting their workplace pension duties has reached one million and that statistics show that approximately 9.3 million people are saving into a pension.
TPR’s Director of Automatic Enrolment, Darren Ryder, said:
‘I am delighted we have reached this important landmark, which shows how far we have come since the start of automatic enrolment.
By successfully meeting their responsibilities, employers have helped reverse the downward trend in workplace saving so that putting earnings into a pension has now become the norm.
The continued support of the pensions industry, including pension and payroll providers and business advisers has been crucial to the success of automatic enrolment. The industry has helped us ensure employers have the tools, information and services they need to comply with the law.
We are now focused on the challenges ahead so that employers continue to understand what they need to do so that staff receive the pensions they are entitled to.’
Minimum pension contributions are set to increase from 6 April 2018 and again in 2019.
|Period||Duration||Employer minimum (%)||Total minimum contribution (%)|
|1||Employer’s staging date to 5 April 2018||1||2|
|2||6 April 2018 to 5 April 2019||2||5|
|6 April 2019 onwards|| ||3||8|
Contact us if you would like help with auto enrolment.
Internet links: TPR press release TPR report TPR contributions increase