As part of autumn statement 2016, the Government have announced that the legislation for the following measures will have immediate effect.
Petroleum revenue tax: cutting administration costs for the oil industry
The Government are introducing legislation to change the returns process for petroleum revenue tax (PRT) in order to reduce administrative burdens for the oil and gas sector. This will allow participators to opt fields out of the PRT regime completely. Operational changes will also simplify the reporting requirements for PRT. The changes will be effective from 23 November 2016 using HM Revenue and Customs’ collection and management powers. This will ensure participators can take advantage of the changes as soon as possible.
First year allowances for charge point infrastructure
The Government are introducing legislation to incentivise investment in ultra-low emissions vehicles (ULEVs). The 100% first-year allowance will allow businesses to deduct charge-point investments from their pre-tax profits in the year of purchase. The relief is designed to encourage the use of electric vehicles by increasing charge-point availability. The changes will take effect from 23 November 2016 to avoid delays to planned investments.
Employee shareholder status
The Government are introducing legislation to remove the capital gains tax exemption and income tax reliefs associated with shares awarded under employee share- holder status. This is in response to evidence suggesting that the status is primarily being used for tax planning. The legislation will have effect in relation to employee share-holder agreements entered into on or after 1 December 2016 in order to prevent forestalling, while allowing outstanding agreements to be finalised. Due to the requirement that seven days must pass between an employee receiving independent advice on an offer and becoming an employee shareholder, this will allow any individual who has received advice before 23 November 2016 the opportunity to finalise the outstanding arrangement. The effective date is to be 2 December where advice is received on 23 November prior to 1.30 pm. Existing employee shareholder agreements will not be affected.
Further details on the measures listed above are contained in the draft legislation, explanatory notes and tax information and impact notes published on the gov.uk website.
As part of autumn statement 2016, the Government have announced that the legislation for the following measures will take effect before the introduction of Finance Bill 2017.
Enterprise investment scheme share conversions
The Government are introducing legislation to amend the qualifying requirements for the enterprise investment scheme and the seed enterprise investment scheme to clarify the application of the rules to share conversion rights. This change will be effective for shares issued on or after 5 December 2016. This is a wholly relieving measure to enable the Government to provide customers with certainty of treatment and enable the processing of a backlog of cases. Further detail on this measure will be contained in the draft legislation, explanatory note and tax information and impact note to be published on the gov.uk website on 5 December 2016.
Hybrids and other mismatches
The Government are issuing a technical note in relation to legislation that was passed as part of the Finance Act 2016, in order to improve the new hybrid mismatch regime. Following consultation with stakeholders, it was agreed that further technical modifications were required in two areas of the legislation. These were with regard to financial sector timing claims and the rules concerning deductions for amortisation. The technical note will set out the detail of the changes required and will be published on the gov.uk website on 5 December 2016. These modifications will take effect along with the new regime on 1 January 2017. Corresponding legislation will be introduced in Finance Bill 2017.
As part of the autumn statement 2016, the Government have made an amendment to public notice 733: flat rate scheme for small businesses.
VAT flat rate scheme
To counter abuse of the VAT flat rate scheme (FRS), the Government are introducing a new 16.5% rate for businesses with limited costs. The new rate will be introduced by statutory instrument and will come into effect on 1 April 2017 with draft legislation published on 5 December 2016. In order to prevent forestalling, HM Revenue and Customs has amended public notice 733: Flat rate scheme for small businesses. The relevant sections (sections 8.2 and 9.7) have force of law and ensure that businesses cannot avoid the new rate by arranging to issue invoices, or receive payments, before 1 April 2017 for services to be performed on or after that date. The amended public notice will be published on 23 November 2016 on the gov.uk website and the relevant rules will take effect from 24 November 2016.