The government has published its draft legislation to implement policies announced in this year’s Summer Budget and Autumn Statement.
The Finance Bill 2016 contains measures aimed at stopping tax evasion, tackling tax avoidance and ensuring that all companies pay their share of tax. The bill has provisions relating to duties, reliefs, VAT, pensions, earnings and benefits, inheritance tax and corporation tax.
Some of the legislation to be implemented include:
- anti-avoidance: a new penalty of 60% of tax due to be charged in cases counteracted by the General Anti-Abuse Rule, to create a disincentive from entering into abusive tax avoidance
- large business tax strategies: large businesses implementing tax strategies to ensure greater transparency and approach to tax to HMRC, shareholders and consumers.
- criminal offence for tax evasion: provide a new criminal offence that removes the need to prove intent for offshore tax evaders
- dividend tax credit: the dividend tax credit will be replaced with a new dividend allowance
- correct past offshore tax non-compliance: new legal requirement for taxpayers to come forward and correct any past offshore non-compliance with associated penalties for tax payers who fail to comply.
From 6 April 2016 the personal savings allowance means 95% of taxpayers will pay no tax on the first £1,000 of their savings income, if they are a basic rate taxpayer and the first £500 if they are a higher rate taxpayer.
David Gauke, Financial Secretary to the Treasury, said:
“The government is committed to creating a tax system that is easy to understand, simple to engage with and hard to evade. It is essential that it successfully supports investment in business, as well as those who work hard and save.”