Ringing in the changes in the New Year
Tuesday, January 3, 2017
So it is said that nothing in life is certain but death and taxes; and where 2016 saw much of the former - from Bowie to Princess Leia leaving us – 2017 will see much change to the latter. This will be the year of the double Budget, many new tax changes, Money Laundering regulations, plus a big year for Making Tax Digital (MTD) and the official start of Brexit.
Kicking off 2017 in January will be the conclusions of the MTD consultation. Alongside it will come draft legislation for the first phase of implementation (i.e. unincorporated businesses). After which we can expect to see the results of the consultation for more complex businesses (i.e. partnerships), corporates and VAT registered businesses.
MTD activity will gather pace through the year, with trials taking place. There are an alleged 1,000 or so firms already testing the software – and the new tax year will see a wider beta testing programme rolled out. Official documents are one thing, but feedback from peers is another thing entirely – it will be fascinating to hear from the practitioners putting the MTD software through its paces.
As we head into Spring, March will deliver us the first of the two Budgets. The Chancellor will set out the tax changes to take effect during the year and the Finance Bill will be put to parliament the following month. Delivered just weeks before the March deadline for triggering Article 50, this will be a Budget with Brexit at the heart of it. At such a politically sensitive time, it is unlikely that it will contain anything too revolutionary and dramatic.
It is hard to predict how Brexit will develop in 2017, but we will at last have more clarity than “Brexit means Brexit” and “a red, white and blue Brexit.” By the end of March the Prime Minister has vowed to trigger Article 50, setting the clock ticking on negotiations with a deadline of two years before the UK's membership of the EU ends (unless EU member states vote to give us more time). DexEU, the department responsible for the UK's negotiations with the EU, will be the one for businesses to watch.
Auto-enrolment rolls on and in 2017 more businesses will set up a pension than in any year. Needless to say, practitioners will have their work cut out helping numerous smaller firms get to grips with auto-enrolment duties. And before auto-enrolment is even complete, 2017 is the year that the government will conduct a review into how the policy is progressing and what improvements could be made.
Lest we forget the previously announced changes that will see the light of day in the new tax year. Inheritance Tax will have a new limit as of April 2017, which will eventually allow each individual to pass on estates valued up to £500,000 tax-free. ‘Making good’ on benefits in kind, a new rate of tax relief for landlords, divided tax changes and more will also all come into effect.
Changes to money laundering regulations can also be expected. The EU’s Fourth Anti-Money Laundering Directive has been in place since 2015, and by June 2017 it requires member states to update new requirements into local law. The treasury has indicated that UK legislation will be passed by then and proposes creating the ‘Money Laundering and Transfer of Funds (Information on the Payer) Regulations 2017.’
It promises to be a busy year – and we will keep members updated throughout. Ringing in the changes at the CPAA this year, we are introducing a new digital format for Practicing Accountant magazine, which will replace the print version you may have received. Based on member feedback, and a need to be more fleet of foot to provide insight and analysis on topical issues, we believe the new digital publication will be even more beneficial. Members should keep an eye on their email inbox over the coming weeks for notification of the first edition. Non-members may want to check out our member benefits page for more on this and many other reasons to join the CPAA.
All that remains to be said is happy New Year, the team at the CPAA wishes you an enjoyable and prosperous 2017.