Tax Simplification

Office of Tax Simplification (OTS)

The OTS will be established on a statutory basis as a permanent office of HM Treasury. The government will commission the OTS to review the closer alignment of income tax and national insurance contributions, and to review the taxation of small companies.

Self-employed national insurance contributions

The government will consult in autumn 2015 on abolishing class 2 NICs and reforming class 4 NICs.

Employee benefits and expenses

A statutory exemption for trivial benefits-in-kind costing less than £50 will be introduced from April 2016.

Travel and subsistence expenses

A discussion paper has been published, outlining a potential framework for new rules for the tax treatment of travel and subsistence expenses, following a report by the OTS.

Simplified expenses –  partnerships

The simplified expenses regime will be amended to ensure that partnerships can fully access the provisions in respect of the use of a home and where business premises are also a home.

Termination payments

The government will consult on the tax and NIC treatment of termination payments to make the system ‘simpler and fairer’.

Consortium link company rule

As announced in the Autumn Statement 2014, the government has removed all the requirements relating to the location (UK or elsewhere) of the ‘link company’ for consortium claims to group relief with effect from 10 December 2014.

Tax administration for individuals and small businesses

The government will publish a roadmap by the end of the year showing how it will transform tax administration for individuals and small businesses over this parliament.

HMRC debtor and creditor interest rate

The rate of interest on taxation-related debts payable under a court judgement or order by HMRC will be set at a rate equal to the Bank of England base rate plus 2%. The late payment interest rate of 3% will apply to taxation-related debts owed to HMRC under a court judgement or order. The changes will apply to all judgements and orders in respect of interest accruing after 7 July 2015.

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