Meet the Co-chairs - TIAG
Mercer & Hole
Cohen & Company (Ohio)
Fineman West & Co. LLP
Meet the Co-chairs - TAGLAW
Williams Mullen (VA)
Author: James Collacott
The latest Federal Budget was announced last n ight, Tuesday, 8 May 2018 by the Treasurer Mr Scott Morrison. The government is proposing measures which focus on strengthening the economy as well as taking further steps to repair the budget over the medium term.
Whilst there was no substantial tax reform of any variety, it is clear that the government see this as an election Budget given the overhaul to personal income tax rates and brackets over the medium term. This includes removing the current 37% rate band as well as various other simplification measures.
For the first time in almost a decade, superannuation came out relatively unscathed. Some minor wins for the SMSF space and concessions for those wanting to contribute to super after age 65 were the highlights.
It is also clear that the government has a continued focus on the collection of tax and has provided substantial funding to regulators to clamp down on non-compliance and unpaid taxes.
Detailed below is a selection of some of the key Budget announcements which are likely to be of interest to many taxpayers.
One Effect of the Recent Tax Reform on Not-for-Profit Organizations
By Howard J. Kass, CPA, CGMA, AEP®
As often as employers are maligned, there are times where they try to do the right thing for their employees. To be fair, many times, an employer may take an action or incur an expense that benefits its employees, knowing that the employer will benefit by a tax deduction for incurring an expense. In some cases, Congress encourages such behavior by explicitly permitting favorable tax treatment for certain programs.
At the same time the employer received a deduction, these fringe benefits were tax-free to the employee. The result? There was a tax benefit to both the employer and the employee for these fringe benefits.
What was the public-policy reason for allowing this fringe benefit? To make it more affordable for employers to attract employees to work in locations where there was no available free parking.
Author: Raj Seewooruttun
HMRC introduced new legislation in the Finance (No. 2) Act 2017 requiring those with undeclared offshore tax liabilities (Income, Capital Gains or Inheritance Taxes) to disclose the liabilities to HMRC. This has to be done on or before 30 September 2018 (and tax needs to be settled).
30 September 2018 is the final date for the disclosure and this coincides with the date more than 100 countries will exchange data on financial accounts under the Common Reporting Standard. In theory, HMRC’s ability to identify offshore non-compliance should increase very significantly and therefore, all taxpayers should take this opportunity to ensure that their affairs are in order before the deadline passes.
Failure to report any relevant information on or before 30 September 2018 means the taxpayer would be subject to the new ‘Failure to Correct’ penalty regime, which is much harsher than the normal penalty regime, with a minimum penalty of 100% of the tax unpaid! The Requirement to Correct (“RTC”) legislation can also be applied in respect to periods prior to 6 April 2017.
After two full Budgets in 2017, this Spring Statement was a less dramatic affair, with no announcements of tax changes. These will come in the Autumn Budget.
The Chancellor launched a number of consultations and other papers about future proposals. The subjects ranged from ways to squeeze more tax from international digital businesses to a proposal for extending entrepreneurs’ relief to some shareholders whose holdings drop below the qualifying 5% level. He has also been mulling the possibility of lowering the VAT threshold.
Last week’s Spring Statement may not have been full of headlines, but there are plenty of changes ahead for farmers and rural businesses, according to accountant Old Mill.
“Whether it’s a reduction in business rates, taxes on red diesel, relaxed planning permission regulations or tightening of Inheritance Tax relief, there is potentially a lot in the pipeline,” says Victoria Paley, manager at Old Mill.