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Tax Updates - January 2020

30 Jan 2020

At Prime, we like to keep our clients updated on the changes that may impact themselves or their business. Below you will find details on changes that will soon be made, that could affect you.

Budget
The Budget has been set for Wednesday 11 March. The Budget could be significant, with Entrepreneurs’ Relief tipped for change. We already know the Budget is expected to include measures to increase tax relief including increases in capital allowances Structures and Buildings Allowances and R&D.

IR35
The Government has launched a review into the implementation of changes to the off-payroll working rules (IR35). The changes due to come into force in April 2020, are designed to make medium and large organisations (over 50 employees) in the private sector responsible for determining the tax status of contractors, i.e. whether they are employed or self-employed. Significant concerns have been raised by business owners and contractors in relation to the implementation of the changes and blanket IR35 determinations.

The review will conclude by mid-February, gathering evidence from affected individuals and businesses aiming for ‘smooth implementation’, suggesting the IR35 reform will go ahead in April 2020 and not be delayed.

Loan charges
HMRC has announced changes to the ‘disguised remuneration loan charge’ legislation. The charge will now apply only to loans made on or after 9 December 2010 and will not apply to loans made before 6 April 2016 if use of the scheme was fully disclosed and HMRC did not open an enquiry. Taxpayers who have not yet settled with HMRC may either provide an estimate of the tax due with their self-assessment return by 31 January 2020, or delay filing until 30 September 2020. 

Draft legislation and more detailed guidance will be published in early 2020. However, HMRC will not be able to process refunds until these changes have become law, which it suggests will be summer 2020.

If you have any concerns or queries about how these changes may affect you or your business, please do not hesitate to contact your relationship director today.