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  • Draft Finance Bill 2019/20

Draft Finance Bill 2019/20

Against the busy backdrop of Brexit and the selection of a new Prime Minister, the Government has published draft clauses to be included in Finance Bill 2019-2020 along with related consultations and response documents. These provide detail and updates on policies and consultations proposed at the 2018 Budget and the Spring Statement 2019.

The key announcements concern the off-payroll working rules, the new Digital Services tax, R&D claims for SMEs, and a range of new anti-avoidance measures.

Off payroll working in the private sector from April 2020

As expected, the Government published draft legislation that will force medium and large private sectors businesses to determine the employment status of contractors they use. The Treasury estimates that these rules will mean UK businesses pay over £1bn in additional taxes in 2020/21 alone: read the details.

Corporate capital loss restriction from April 2020

From 1 April 2020 capital losses carried-forward can only be used to offset 50% of any net chargeable gains. Read more on the transitional rules and the annual deductions allowance.

UK digital services taxes to go ahead

The UK government has published draft legislation to allow it to press on with the introduction of the Digital Services Tax from April 2020. The proposed rules include a new partial relief, details on relevant profit calculations and administrative procedures for affected groups. Read more.

Deferral of corporation tax payments on EU group asset transfers

The current UK tax rules can impose an immediate charge when an EU group transfers assets out of the UK. This has been judged (by the First-tier Tax Tribunal) to infringe EU freedom of establishment principles – read more on how the new legislation is designed to resolve the issue.  

EIS - Approved Knowledge Intensive Company investment fund

The Government is pressing ahead with the creation of a new ‘approved EIS Fund’ structure for investment into Knowledge Intensive Companies from April 2020 (although the existing ‘Approved EIS Funds’ will not be available from that date. Read more on the new KIC investment funds.

Changes to company car benefits rates for 2020-21

For the first time in many year the car benefit rates will be reduced, particularly for zero emissions vehicles, but it is only a temporary reduction. Read more.

Stamp Duty and SDRT changes

The government has announced technical changes to prevent existing anti-avoidance legislation affecting some common transactions. Read more.

Insolvency tax measures

The government has published draft legislation designed to protect tax revenues when businesses enter insolvency by making directors liable for a company’s tax debts and making HMRC a preferred creditor insolvencies. Read more.

Changes to capital gains tax – private residence relief and lettings relief

The Government has published draft provisions changing a few key aspects of principal private residence relief (PPR). Read more.