Need to know

Payrolling employer-provided benefits to be mandated from 2026: The government will mandate the reporting and paying of income tax and class 1A national insurance contributions on benefits-in-kind via payroll software from April 2026.

Pensions lifetime allowance guidance newsletter: HMRC has released its December 2023 newsletter, which addresses several aspects connected to the abolition of the pensions lifetime allowance.

New form for appealing corporation tax penalties: HMRC has introduced an interactive form to speed up the process for corporation tax penalty appeals.

HMRC challenges UK VAT status of online traders: HMRC will contact businesses believed to be non-established taxable persons for VAT purposes. The business will then have 30 days to challenge HMRC’s decision.

Scotland: new LBTT relief and changes to the ADS: New relief for local authority purchases comes in from 1 April 2024, together with numerous changes to the additional dwelling supplement.

UK announces introduction of carbon border adjustment mechanism: A carbon pricing mechanism for imports will be implemented by 2027 to support decarbonisation.

UK international tax reform on the horizon? There is broad support for measures to reform the transfer pricing, permanent establishment and diverted profits tax rules.

Headline tax announcements from the Scottish and Welsh Budgets: On 19 December, Deputy First Minister Shona Robison presented the Scottish Budget for 2024 to 2025 to the Scottish Parliament. On the same day, Finance Minister Rebecca Evans issued various statements alongside the Welsh Draft Budget for 2024-25.

Member help sheets and guidance

Calculating NIC for directors in 2023/24: ICAEW’s Tax Faculty explains how to calculate national insurance contributions (NIC) for directors this year, including where the alternative method is used.

Help for postmasters completing 2022/23 tax returns: HMRC has advised that postmasters who do not receive a top-up payment in good time to meet the 31 January 2024 filing deadline will not be subject to interest and penalties. HMRC also has a specialised team to deal with queries from postmasters.

Self assessment tax returns for cryptoasset holders: Individuals who received, sold or exchanged cryptoassets may be subject to income tax or capital gains tax that should be reported on a self assessment tax return, due by 31 January 2024.

HMRC clarifies capital allowances rules for partnerships: HMRC has updated its guidance to make it clear that a partnership that includes a corporate member may claim capital allowances generally restricted to companies. These include the super deduction and full expensing.

ICAEW briefs MPs on key clauses ahead of Finance Bill debates: MPs are scheduled to start debating Finance Bill 2023-24 on 10 January. ICAEW has produced briefings on R&D, pensions, provision of additional data and promoters of tax avoidance.

Car allowances and NIC: HMRC updates its approach on the national insurance contributions (NIC) disregard for relevant motoring expenditure following Upper Tribunal decision.

Expanded guidance on taxation of woodlands: HMRC has reviewed and expanded its tax guidance for owners of woodlands. Owners may qualify for certain tax reliefs or exemptions from certain taxes, depending on the type and use of the woodlands.

Compulsory purchases of land under contract: HMRC has updated its guidance to clarify the date of disposal where there is a compulsory purchase. Where a disposal is made under an unconditional contract, the date of disposal is the date the contract is made.

Consultations

HMRC maintains current approach to VAT treatment of fund management: Following a consultation, the government has confirmed it will keep a list-based approach to the VAT exemption for management of funds.

Government consults on tax simplification for alternative finance: The government has proposed changing the capital gains tax rules to ensure that alternative finance arrangements are taxed in the same way as other arrangements.

Update on audio-visual tax relief regime: Following a consultation and the publication of draft legislation in July 2023, the Autumn Statement confirmed that film, TV and video games tax reliefs will be reformed into refundable expenditure credits.

ICAEW responds to latest MTD ITSA consultation: Amendments to the regulations and notices for making tax digital income tax self assessment (MTD ITSA) need to be set in the context of wider concerns about the programme.

Have your say: extending the LTT refund window: The Welsh government proposes to extend the three-year exception and refund period for higher land transaction tax (LTT) residential rates in specified circumstances.

LTT relief for Welsh freeports will be different: Welsh government consultation on land transaction tax (LTT) relief for special tax sites in freeports and investment zones highlights six differences compared to the stamp duty land tax relief in England.

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