VAT – Rewrite of the option to tax provisions
There has already been extensive consultation on a proposal to rewrite Schedule 10 VAT 1994 which deals with the election to waive exemption in respect of interest in property. Schedule 10 is an extremely complex piece of legislation extended significantly since its first introduction in 1989, especially in the area of anti-avoidance. The rewrite is intended to simplify the language and structure of Schedule 10 with only minor changes of tax policy. The new provisions are expected to come into force soon after the Finance Bill receives Royal Assent (usually in July).
Increase in VAT turnover threshold
The annual taxable turnover threshold for determining whether a person must be registered for VAT is increased from £60,000 to £61,000 in line with similar increases in the European Union Member States. Similarly the deregistration threshold has risen from £58,000 to £59,000.
Changes to the disclosure regime
Tax professionals and their clients are required by legislation to disclose certain income tax, corporation tax and capital gains tax schemes and arrangements that concern either employment arrangements or certain finance products. Stamp duty land tax schemes were also added last year.
For schemes that are made available or implemented on or after 1 July 2006, new regulations will be introduced that will apply the disclosure rules to the whole of income tax, corporation tax and capital gains tax. Further, if a scheme falls within one of a number of prescribed hallmarks, it will also be disclosable and the time limits for notification of in-house schemes will be reduced.
In December 2005 a consultation process was launched regarding the proposed introduction of a planning gain supplement, though not before 2008. An allusion to planning gains in the Chancellor's speech yesterday suggests this is disappointingly still on the cards.