Welcome to the September 2019 Newsletter from Walsh & Co
The government has fast-tracked its Spending Review in order to provide its departments with 'financial clarity' on Brexit. Chancellor Sajid Javid stated that a one-year budget allocation would allow civil servants to both press ahead with improvements to public services and plan for Brexit.
Meanwhile, MPs have called for an independent review of HMRC's Loan Charge, which came into effect earlier this year. According to MPs, a 'thorough review' of the Loan Charge must be carried out, and the 31 October Loan Charge payment deadline should be delayed.
Government fast-tracks Spending Review to give 'financial clarity' on Brexit
Chancellor Sajid Javid has announced that a one-year Spending Review will be carried out in September, in order to provide government departments with 'financial clarity' ahead of Brexit.
According to the Chancellor, a one-year budget allocation would allow civil servants to simultaneously press ahead with improvements to public services and prepare for Brexit, which is currently set to take place on 31 October.
The Spending Round will support commitments made by Prime Minister Boris Johnson since he came to office, including the recruitment of 20,000 extra police officers and additional funding for schools and the NHS. The Spending Round will set departmental day-to-day spending budgets for 2020/21.
Commenting on the September Spending Review, the Chancellor said: 'The Prime Minister and I have asked for a fast-tracked Spending Round for September to set departmental budgets for next year. This will clear the ground ahead of Brexit, while delivering on people's priorities.'
Meanwhile, the Institute for Fiscal Studies (IFS) said: 'The ongoing uncertainty surrounding the nature of the UK's departure from, and future relationship with, the EU means that the outlook for the UK economy is currently highly uncertain.
'Given that, setting departmental budgets for just one year is understandable, and leaves the government more flexibility to respond to future developments.'
The government intends to carry out a multi-year Spending Review in 2020.
MPs call for review of HMRC's Loan Charge
Prime Minister Boris Johnson has come under pressure from MPs in his own party to make good on a promise to launch an independent review of HMRC's controversial Loan Charge.
Johnson promised a review during the Conservative Party leadership election, but has not acted since arriving in 10 Downing Street. Former cabinet minister Iain Duncan Smith and Ross Thompson, Vice-Chair of the Loan Charge All-Party Parliamentary Group are amongst the Conservative MPs calling for the Prime Minister to allow a 'thorough review' and a delay to the 31 October Loan Charge payment deadline.
The Loan Charge, which came into effect on 6 April this year, applies to anyone who used 'disguised remuneration' schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs by 5 April.
The charge mainly affects freelancers and agency workers: however, many of the 50,000 people affected by the issue are low paid and were persuaded by their employers to join the schemes. The typical sum owing, according to the Loan Charge Action Group (LCAG), is almost £120,000.
Commenting on the Loan Charge, a Treasury spokesperson said: 'The Loan Charge is designed to tackle tax avoidance and ensure everyone pays their fair share. It builds on more than two decades of HMRC action to challenge these schemes.'
For more information on the Loan Charge, please take a look at the Hot Topics section of our website.
ESSENTIAL TAX DATES FOR SEPTEMBER
New Advisory Fuel Rates (AFR) for company car users apply from today.
PAYE, Student loan and CIS deductions are due for the month to 5 September 2019.
End of CT61 quarterly period.
QUOTE OF THE MONTH
'Generally, I want to see lower taxes, but at a level that is going to pay for the public services.'
Chancellor Sajid Javid, commenting on his plans for the UK tax system.
WEBSITE OF THE MONTH
Provides information on the latest happenings in the world of business.
ON OUR WEBSITE
A wealth of resources for businesses
With topics ranging from PAYE to VAT, the Your Business section of our site is a hub of essential information.
Useful information for individuals
For a comprehensive bank of guides covering Individual Savings Accounts, pensions tax reliefs and much more, please visit the Your Money area of our website.