FINANCE ACT 2015 AND SECOND FINANCE BILL Tolley® CPD Seminars by Rebecca Benneyworth Disclaimer Tolley® takes every care when preparing this material. However, no responsibility can be accepted for any losses arising to any person acting or refraining from acting as a result of the material contained in these notes. All rights reserved. No part of these notes may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Tolley®. For more information on Tolley® CPD Seminars please visit tolley.co.uk/cpdseminars Finance Act 2015 and second Finance Bill 1. Corporation and Business income Tax ................................................................................ 3 1.1 Corporation tax rates .................................................................................................... 3 1.2 Corporation tax payment dates .................................................................................... 3 1.3 Annual investment allowance ....................................................................................... 3 1.4 Flood defence contributions ......................................................................................... 4 1.5 Averaging for farmers ................................................................................................... 4 1.6 Capital allowances ....................................................................................................... 4 1.7 Internally generated goodwill and customer related intangible assets......................... 5 1.8 Rates of R & D relief ..................................................................................................... 5 1.9 Other R & D changes ................................................................................................... 5 1.10 Employment allowance ................................................................................................ 6 1.11 Changes to the minimum wage .................................................................................... 7 1.12 Class 2 NI contributions ............................................................................................... 7 1.13 Creative sector reliefs ................................................................................................... 7 1.14 Loan relationships – late paid interest .......................................................................... 8 1.15 Loan relationships – wholesale reform ......................................................................... 8 1.16 Diverted profits tax ....................................................................................................... 9 1.17 Election of “designated currency” ............................................................................... 10 1.18 Impact of transfer pricing provisions .......................................................................... 10 1.19 Country by country reporting ...................................................................................... 10 1.20 Anti-avoidance measures ........................................................................................... 10 2. Income Tax ............................................................................................................................. 12 2.1 Tax rates and thresholds 2015/16 onwards ............................................................... 12 2.2 Indexation of personal allowances ............................................................................. 13 2.3 Income Tax lock ......................................................................................................... 13 2.4 National Insurance Contributions ............................................................................... 14 2.5 Cars – the appropriate percentage ............................................................................ 14 2.6 Zero emission vans .................................................................................................... 15 2.7 Abolition of £8,500 threshold for benefits in kind ....................................................... 16 2.8 Exemption for reimbursed expenses and related benefits ......................................... 16 2.9 Trivial benefits ............................................................................................................ 17 2.10 Payrolling benefits in kind ........................................................................................... 18 2.11 The use of umbrella companies ................................................................................. 18 2.12 Fixed rate deductions ................................................................................................. 18 2.13 Increase in rent a room relief...................................................................................... 19 2.14 Removal of the wear and tear allowance ................................................................... 19 2.15 Restriction of tax relief on interest in respect of let domestic property ...................... 19 2.16 Dividend taxation ........................................................................................................ 22 2.17 Incorporation advice ................................................................................................... 25 2.18 Remittance basis charge ............................................................................................ 28 2.19 Proposed changes to non-domicile status ................................................................. 29 2.20 Charity gift aid relief .................................................................................................... 29 2.21 Expenses of members of local authorities ................................................................. 29 2.22 Sporting testimonials .................................................................................................. 30 2.23 Income tax exemption – 2015 Anniversary Games ................................................... 30 2.24 Tax credit changes ..................................................................................................... 30 2.25 Tax credit claims by the self employed ...................................................................... 31 2.26 Bereavement support payment .................................................................................. 31 2.27 Anti-avoidance measures ........................................................................................... 31 3. Savings and investment measures ..................................................................................... 32 3.1 Personal savings allowance ....................................................................................... 32 3.2 Pensions lifetime allowance ....................................................................................... 32 3.3 Pensions – annual allowance ..................................................................................... 32 3.4 Restriction of annual allowance for high income individuals ...................................... 35 August 2015 Page 1 Finance Act 2015 and second Finance Bill 3.5 Pensions – lump sum death benefit tax charge ......................................................... 36 3.6 Pensions – certain lump sum death benefits ............................................................. 36 3.7 Further pension reform ............................................................................................... 37 3.8 Sale of annuities ......................................................................................................... 37 3.9 Inherited annuities ...................................................................................................... 37 3.10 Excluded activities for investment reliefs ................................................................... 37 3.11 EIS changes in Second Finance Bill 2015 ................................................................. 38 3.12 VCT changes in Second Finance Bill 2015 ................................................................ 39 3.13 Social investment tax relief ......................................................................................... 39 3.14 Social Venture Capital Trusts (Social VCT’s) ............................................................. 39 3.15 Help to buy ISA .......................................................................................................... 39 3.16 Transfer of ISAs on death of spouse .......................................................................... 40 3.17 ISA and JISA limits ..................................................................................................... 40 3.18 The flexible ISA .......................................................................................................... 40 3.19 Premium Bond limit .................................................................................................... 40 3.20 Relief for bad debts on peer-to-peer lending .............................................................. 40 4. Capital and property taxes ................................................................................................... 41 4.1 CGT annual exemption .............................................................................................. 41 4.2 Capital gains tax – non-resident individuals ..............................................................