The personal allowance for those born after 5 April 1948 will rise from its previously announced level of £10,000 for 2014-15 to £10,500 for 2015-16. At the same time, the basic rate limit will be reduced from £31,865 to £31,785. However, this represents a tax saving for all taxpayers, as the higher rate threshold will increase by 1% in each of those two years.

In relation to the 2014-15 personal allowance and rate limits, the automatic increase in line with the Retail Prices Index (RPI) to September 2014 has already been introduced by secondary legislation (see Legal update, Income tax limit and allowances indexation for 2014-15), but, as in previous years, the Finance Bill 2014 will override those provisions, to bring the level of the allowance to £10,000.

The Finance Bill 2014 will also amend the indexation provisions by substituting the Consumer Price Index as the point of reference in place of RPI for 2015-16 onwards. It will also remove references to individuals born after 5 April 1938 but before 1948 as there will be no separate level of allowance for that group of taxpayers with effect from 2015-16.

For information on income tax rates and limits generally, see Practice note, Tax data: income tax.

(See TIIN: Income tax personal allowance for those born after 5 April 1948 and basic rate limit for 2015-16, HM Treasury: 2014 Budget, paragraphs 1.176-1.177, 2.64-2.65 and 2.67 and Overview, paragraph 1.3.)

The starting rate of income tax for savings income will go down from 10% to 0%, with effect from 6 April 2015. The maximum amount of an individual's savings income that qualifies for the starting rate of income tax will increase from £2,880 to £5,000 from the same date.

Savings income is taxed as the middle slice of an individual's income (before dividend income, but after other income). The proposed changes will mean that an individual, whose total taxable income is less than the starting rate limit of £15,500 (combining the personal allowance of £10,500 and the new savings starting rate limit of £5,000), will pay no tax on their savings up to the starting rate limit. For individuals who have savings income below £15,500 and no other income, no tax will be payable.

For information on income tax rates and limits generally, see Practice note, Tax data: income tax.

(See TIIN, The starting rate of tax for savings, HMRC: The starting rate of tax for savings: Bulletin and FAQs, HM Treasury: 2014 Budget, paragraph 2.43 and Overview, paragraph 1.5.)

The transferable tax allowance for married couples and civil partners will be £1,050 in the tax year 2015-16 (and not £1,000, as announced in the Autumn Statement on 5 December 2013 (see Legal update, 2013 Autumn Statement: private client implications: Lifetime planning: Income tax: marriage transferable tax allowance). From 2016-17, the transferable amount will be 10% of the personal allowance for those born after 5 April 1938.

The transferable tax allowance for married couples and civil partners is available to spouses or civil partners who are not higher or additional rate tax payers. Electing to transfer the transferable amount will result in a corresponding reduction in the personal allowance of the transferor and a reduction in the recipient's income tax liability at the basic rate of tax.

Draft legislation to provide for the transferable allowance was published on 10 December 2013 (see Legal update, Draft Finance Bill 2014 legislation: key private client measures: Lifetime planning: Income tax: transferable tax allowances for married couples).

To follow the progress of this measure, see Private client tax legislation tracker 2013-14: Lifetime planning: Income tax: marriage transferable tax allowance.

(See TIIN, Transferable tax allowances for married couples and civil partners, HM Treasury: 2014 Budget, paragraphs 1.178 and 2.66, Overview, paragraph 1.4 and Annex B, B1 and HM Government: Budget 2014: policy costings, page 13.)

From 1 April 2015, dwellings valued at over £1 million up to £2 million will be brought within the scope of ATED. Dwellings valued at over £500,000 up to £1 million will fall within the scope of ATED from 1 April 2016.

ATED forms part of a package of measures introduced by the government to dissuade individuals from acquiring (and, therefore, holding) high-value residential property (that is, dwellings valued at over £2 million) in the UK through companies, partnerships with at least one corporate member or collective investment schemes (so-called enveloping). Broadly, the level of the ATED charge depends on which of four property value bands the dwelling falls within (see Practice note, Annual tax on enveloped dwellings (ATED): Annual chargeable amount).

The Finance Bill 2014 will introduce two new ATED bandings:

One of the major flaws in the design of ATED is that large numbers are brought within the scope of the ATED charge (even though those persons carry on genuine commercial activities). This has meant that those that are not meant to be caught by the tax are required to claim one of the many reliefs (see Practice note, Annual tax on enveloped dwellings (ATED): Reliefs). The government has said that it will consult on possible options to simplify the administration of ATED (in particular for property businesses eligible for reliefs), but there is no date for when this will happen.

(See TIIN, Taxation of high value UK residential property held by certain non-natural persons, HM Treasury: 2014 Budget, paragraphs 1.192-1.195 and 2.185-2.184, Overview, paragraph 1.36 and HM Government: Budget 2014: policy costings, page 42.)

The capital gains tax (CGT) charge on disposals of property subject to the annual tax on enveloped dwellings (ATED) will be extended to the two new ATED bands announced in the 2014 Budget (see Annual tax on enveloped dwellings (ATED) to be extended to dwellings over £500,000). In line with the introduction of the new ATED bands, the extension of the CGT charge will be in two stages. Disposals of enveloped properties with a value over £1 million up to £2 million will be subject to CGT from 6 April 2015 and disposals of enveloped properties with a value over £500,000 up to £1 million will be subject to CGT from 6 April 2016. CGT will only apply to gains that have accrued on or after those dates. A charge to CGT on disposals of high value residential properties held by companies, certain collective investment schemes and partnerships with a corporate partner was introduced in the Finance Act 2013 as a means of discouraging taxpayers from holding assets within corporate envelopes in order to avoid SDLT. The CGT charge applies to both UK and non-UK resident corporate entities subject to ATED. For more information on the ATED-related CGT, see Practice note, Capital gains tax charge relating to annual tax on enveloped dwellings (ATED).

(See TIIN, Taxation of high value UK residential property held by certain non-natural persons and HM Treasury: 2014 Budget, paragraphs 1.192-1.195 and 2.184.)

The 15% SDLT rate, that currently applies to acquisitions of high-value residential property (HVRP) (£2 million or more) by companies, partnerships with at least one corporate member and collective investment schemes, is extended to residential property acquisitions with a chargeable consideration exceeding £500,000.

The 15% SDLT rate was introduced in the Finance Act 2012 to discourage occupiers from buying through a company or other wrapper (so-called enveloping). This represented part of a package of measures, which also included the annual tax on enveloped dwellings (see Annual tax on enveloped dwellings (ATED) to be extended to dwellings over £500,000). For more information, see Legal update, SDLT legislation: the 15% charge on enveloping high-value residential property.

The Finance Bill 2014 will amend Schedule 4A to the Finance Act 2003 to bring this change into effect. The amended rules will apply to transactions with an effective date on or after 20 March 2014. However, transitional provisions should exclude from the rules most transactions effected under contracts entered into before 20 March 2014 even though completed on or after that date. Where relevant, the transitional rules should be scrutinised to ensure that a transaction effected under a pre-20 March 2014 contract is excluded.

(See TIIN, Changes to the taxation of high value UK residential property held by certain non-natural persons, HM Treasury: 2014 Budget, paragraph 2.184 and Overview, paragraph 1.35.)

The Chancellor announced major changes to the way that members of defined contribution pension schemes can access their pensions savings. The changes represent a significant shift away from the requirement that a member purchase an annuity and a relaxation in the tax charges that are applied to the withdrawal of funds by members. The changes come in two parts. Transitional changes will be introduced on 27 March 2014. The wider changes, due to come into force in April 2015, will be the subject of a consultation exercise until 11 June 2014.

(For coverage of these measures and links to the relevant sources, see Legal update, 2014 Budget: key pensions announcements.)

The government will also be consulting on ways to give equivalent treatment to Qualifying Non-UK Pension Schemes (QNUPS) and UK-registered pension schemes, with the aim of ensuring fairness and removing opportunities to avoid inheritance tax. Legislation is to be introduced in the Finance Bill 2015.

(See HM Treasury: 2014 Budget, paragraph 2.63 and Overview, paragraph 2.3.)

From 1 July 2014, the individual savings account (ISA) subscription limit will increase to £15,000 for 2014-15. All existing ISAs will automatically become New ISAs (NISAs) on that date. A NISA can hold any mix of cash and shares, and funds can be moved freely between these categories. It will also be possible to have a separate NISA for each category in each tax year, subject to the overall subscription limit. The range of permitted investments for shares NISAs will be widened.

This represents a significant increase in flexibility for savers. The previously announced ISA annual subscription limit for 2014-15 is £11,800, and only half of this amount can be held in cash. These limits will still apply before 1 July 2014, to allow ISA providers time to adapt.

The Junior ISA limit for 2014-15 will increase from £3,840 to £4,000 on 1 July 2014 (as will the Child Trust Fund limit). Individuals aged between 16 and 18 will be able to take out a NISA but it will only be able to hold cash, as is currently the case for ISAs.

The government will implement these changes in secondary legislation amending the Individual Savings Account Regulations 1998 (SI 1998/1870) and the Child Trust Fund Regulations 2004 (SI 2004/1450). For information about the current rules, see Practice note, Tax data: individual savings accounts.

(See TIIN, The New ISA and changes to Junior ISA and the Child Trust Fund: increasing flexibility for savers and investors, HMRC: The New ISA and changes to Junior ISA and the Child Trust Fund: increasing flexibility for savers and investors: Bulletin to ISA managers and FAQs, HM Treasury: The New ISA - factsheet, HM Treasury: 2014 Budget, paragraphs 1.167-1.169 and 2.44-2.48 and Overview, paragraph 1.73 and Annex B, B9.)

The limit for investment in premium bonds will increase from £30,000 to £40,000 on 1 June 2014. It will rise again, to £50,000, in 2015-16.

Premium bond prizes are exempt from income tax and capital gains tax, but the value of the bond is taken into account for inheritance tax (see Practice note, Valuing the deceased's estate: initial enquiries into assets common to most estates: Premium bonds).

(See HM Treasury: 2014 Budget, paragraphs 1.89, 1.175 and 2.49.)

The annual cap on the total tax reductions that can be claimed by taxpayers under the cultural gifts scheme (CGS) will be increased from £30 million to £40 million from 6 April 2014. The cap is shared with acceptance in lieu claims relating to inheritance tax. The CGS allows taxpayers to reduce their liability to income tax and capital gains tax in exchange for donating culturally pre-eminent assets to the nation. When the scheme was introduced in April 2012, the government said that it would consider increasing the cap in the future depending on the amount of taxpayer take-up. Data relating to existing claims under the scheme indicates that all of the £10 million increase is likely to be used. For more information on the CGS, see Practice note, Tax reduction for gifts of art to the nation.

(See HM Treasury: 2014 Budget, paragraph 2.93 and HM Government: 2014 Budget: policy costings, page 35.)

For information on the draft Finance Bill 2014 legislation amending flawed provisions in Schedule 14 to the Finance Act 2012 dealing with the interaction between the CGS and estate duty clawback provisions, see Cultural gifts scheme and estate duty.

As announced in the 2013 Autumn Statement, the Finance Bill 2014 will include legislation to prevent avoidance involving partnerships. For details of the proposals, see Legal update, 2013 Autumn Statement: business tax implications: Partnerships and avoidance).

Following the publication of draft legislation at Autumn Statement, the government published a revised draft of the rules for salaried members of limited liability partnerships on 7 March 2014 (see Legal update, Salaried members rules for LLPs: revised Finance Bill 2014 clauses). However, it appears that further amendments (although it is not clear to what aspects of the proposed rules) can be expected: the Overview states that "a number of minor amendments have been made to other elements of the legislation" and indicates that the government will publish a further draft of the rules as part of the Finance Bill 2014, along with revised guidance.

To follow the progress of these measures, see Private client tax legislation tracker 2013-14: Taxation of partnerships.

(See HM Treasury: 2014 Budget, paragraph 2.197 and Overview, paragraph 1.57.)

HM Treasury has provided an update on the government's response to the various recommendations of the OTS. These include:

The OTS will publish the results of its current consultation on the competitiveness of the UK tax administration in the summer 2014 (see Legal update, 2013 Autumn Statement: business tax implications: Review of competitiveness of UK tax administration). In particular, the OTS wants to understand the difficulties faced (primarily, though not exclusively, by the SME sector) when preparing and filing taxes and dealing with HMRC.

(See Letter from Exchequer Secretary to OTS: response to partnerships and employee benefits reviews, OTS/HM Treasury, Competitiveness of UK tax administration review and HM Treasury: 2014 Budget, paragraph 2.216.)

The government has confirmed that the measures announced in the Autumn Statement 2013 and subsequently amended and clarified following consultation, including a targeted anti avoidance rule, (see Tax legislation tracker: employment: Review of employment intermediaries), will be contained in the Finance Bill 2014 and will have effect from 6 April 2014. The measures are aimed at reducing the amounts of tax and national insurance contributions lost through false self employment and make employment intermediaries accountable to HMRC for the tax and NICs on remuneration received by workers from deemed employment that is not otherwise subject to PAYE.

(See HM Treasury: 2014 Budget, paragraph 2.194 and Overview, paragraph 1.56.)

The Chancellor has announced that the seed enterprise investment scheme (SEIS), which is designed to encourage individuals to invest in start-up trading companies, is to be made permanent.

Currently, SEIS income tax relief applies to investments in qualifying shares issued on or after 6 April 2012 and before 6 April 2017 up to an annual investment limit of £100,000. CGT reinvestment relief applies to gains accruing in 2013-14 provided an investment in qualifying shares is made in 2013-14. The maximum amount that can be invested is £100,000 and the maximum CGT relief is £50,000. For further details about SEIS, see Practice note, Seed Enterprise Investment Scheme (SEIS).

Legislation will be introduced in the Finance Bill 2014 to remove these time limits. The removal of the income tax relief time limit will take effect from the date that Finance Bill 2014 receives Royal Assent. Extension of CGT re-investment relief will have effect for re-invested gains accruing in 2014-15 and subsequent tax years.

(See TIIN, Making the Seed Enterprise Investment Scheme and the capital gains tax reinvestment relief permanent, HM Treasury: 2014 Budget, paragraphs 1.117 and 2.78 and Overview, paragraph 1.31.)

The government will introduce legislation in the Finance Bill 2014 to prevent companies that benefit from Department of Energy and Climate Change renewable obligations certificates or renewable heat incentive subsidies from benefitting from investment under the venture capital trust legislation, enterprise investment scheme (EIS), or seed enterprise investment scheme (SEIS). For further details on the schemes, see Practice notes:

For the purposes of EIS and SEIS, the legislation will take effect for shares issued on or after Royal Assent to the Finance Bill 2014 and, for VCTs, in respect of investments made by a VCT on or after the date of Royal Assent. The government will also consult on broadening the exclusion to prevent other low risk activities that benefit from government subsidies from benefitting from the reliefs.

Additionally, the government will consult on allowing venture capital reliefs to apply to investments made in the form of convertible loans. It appears that a broad consultation exercise in relation to VCTs, EIS and SEIS generally will be carried out in the summer of 2014, with a view to including any legislation required in a future Finance Bill.

(See HM Treasury: 2014 Budget, paragraphs 2.79-2.80 and Overview, paragraphs 1.59 and 2.10.)

As announced in the 2013 Autumn Statement, the government has confirmed that it will introduce legislation in the Finance Bill 2014 to restrict relief for an investment in a Venture Capital Trust (VCT) that is linked to a buy-back of other shares held by the investor in that VCT (see Legal update, 2013 Autumn Statement: business tax implications: Venture capital trusts: no relief for investments linked to buy-backs) and to prevent VCTs from using share premium accounts to return capital to investors within three years of the end of the accounting period in which an investment was made.

Individuals who invest in a VCT are entitled to claim income tax relief at the rate of 30% on the amount invested, subject to a maximum cap, and to claim relief from tax on chargeable gains on the subsequent disposal of the shares, provided certain conditions are met. For further information, see Practice note, Venture Capital Trusts.

Following concerns that buy-backs of VCT shares followed or preceded by the issue of new shares to the same investor are giving rise to multiple claims for tax relief on (essentially) a single investment, the government intends to introduce legislation in the Finance Bill 2014 to prevent this activity. The new rules, to be inserted into the existing VCT legislation at Part 6 of the Income Tax Act 2007, will reduce the amount of an investment on which income tax relief can be claimed by the amount received by that investor on a "linked" sale of shares in the same VCT (or a predecessor or successor of the VCT). An investment and sale will be linked where one is conditional on the other, or where they occur (in any order) within six months of each other. The provisions will not apply where an investor reinvests amounts received by way of dividend from the VCT.

Similarly, following concerns about VCTs using share premium accounts to return capital to investors, the government intends to introduce legislation in the Finance Bill 2014 to prevent this. Following a consultation exercise with the VCT industry in January 2014, it became clear to HMRC that the use of share premiums to return capital to investors was not widespread and, where it does occur, tends to be within the first years of fund raising. In the light of this, HMRC proposes to introduce a restriction that limits a VCT's ability to return share capital to an investor that does not represent profits made on investments. The restriction will apply for the 3 year period beginning with the end of the accounting period in which funds are raised. The restriction will apply to investments from shares issued on or after 6 April 2014. However, the restriction will not limit the VCT's ability to pay dividends from realised profits and will not apply to funds used to redeem or repurchase shares or to assets distributed in the course of a winding up. If the VCT infringes the new restriction, it will have its approved status withdrawn.

The Finance Bill 2014 will also introduce legislation to:

(See TIIN, Venture Capital Trusts, TIIN, Venture capital trusts return of capital, Update on changes to Venture Capital Trusts, HM Treasury: 2014 Budget, paragraph 2.79 and Overview, paragraphs 1.58 and 1.60.)

Finance Bill 2014 will include provisions to amend the sections of the Income Tax Act 2007 (ITA 2007) that deal with the Scottish rate of income tax (SRIT).

Sections 6(2A) to (2C) of the ITA 2007 will be repealed and replaced with new sections 6A and 11A. Although the calculation of the SRIT rates will remain the same, the new sections amend the structure of the provisions to allow for more straightforward implementation of proposals set out in a technical note published in 2012, which set out the government's policy intentions in situations where the SRIT interacts with other areas of the income tax system such as gift aid and pensions tax relief (see Legal update, Scottish rate of income tax: interaction with other areas of income tax system).

The amendments to the ITA 2007 are expected to take effect on 6 April 2016.

(See TIIN, Legislative changes resulting from the introduction of the Scottish rate of income tax, HM Treasury: 2014 Budget, paragraph 2.75 and Overview, paragraph 1.69.)

Legislation will be introduced in the Finance Bill 2014 (FB 2014) to treat funds in a foreign currency bank account in the same way as excluded property for the purpose of restrictions on deducting inheritance tax (IHT) liabilities. It will apply in relation to deaths on or after the date of Royal Assent.

The value of foreign currency bank accounts is left out of account when calculating IHT on the death of an individual who was not domiciled or resident in the UK (section 157, Inheritance Tax Act 1984). However, accounts within section 157 of IHTA 1984 are not excluded property, so they are not caught by the restrictions on deducting IHT liabilities that were introduced by the Finance Act 2013 with effect from 17 July 2013.

FB 2014 will prevent a liability from being deducted from the value of an estate where the borrowed funds have been transferred, directly or indirectly, into a foreign currency bank account that is left out of account for IHT purposes.

For information about the current rules on deducting liabilities for IHT purposes, see Practice note, Inheritance tax: restricted deduction of liabilities.

(See TIIN, Inheritance tax: liabilities and foreign currency bank accounts, HM Treasury: 2014 Budget, paragraph 2.88 and Overview, paragraph 1.14.)

The government will consult on options for an inheritance tax (IHT) exemption for emergency service personnel who die while on active service, or whose death is hastened by injury sustained in the line of duty. This will be an extension of the current exemption for members of the armed forces (section 154, Inheritance Act 1984). Legislation will be included in the Finance Bill 2015.

(See HM Treasury: 2014 Budget, paragraph 2.89 and Overview, paragraph 2.7.)

A consultation document on how best to extend capital gains tax (CGT) to disposals of UK residential property by non-UK residents will be published shortly after the 2014 Budget. The extension of CGT to non-UK residents (to be included in the Finance Bill 2015) was first announced in the 2013 Autumn Statement when the publication date for the consultation was scheduled for early 2014. The consultation has been anxiously awaited since then with concerns being raised that there may not be sufficient time to consult on any draft legislation before the measure is introduced in 2015. To follow this measure, see Private client tax legislation tracker 2013-14: CGT: disposal of UK residential property by non-residents.

(See HM Treasury: 2014 Budget, paragraph 2.81 and Overview, paragraph 2.9.)

The government intends to consult on whether and how the income tax personal allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK (as is the case in a number of countries, including most EU countries). For the current position of non-UK residents in respect of claiming personal allowances, see HMRC's Residence, Domicile and Remittance Basis Manual (RDRM) at RDRM10340 - Residence: Personal Allowances: Non-resident individuals who may claim personal allowances under the provisions of Double Taxation Agreements.

(See HM Treasury: 2014 Budget, paragraph 2.67 and Overview, paragraph 2.8.)

The Finance Bill 2014 will combat the use of artificial dual contracts by non-domiciled employees. However, following consultation there will be some technical changes to the draft legislation.

These proposals were published for consultation in January 2014 (see Legal update, Draft Finance Bill 2014: dual employment contracts and non-domiciles).

Following the consultation, the government has decided:

These changes should target the new rules more closely on dual contracts that are created for tax avoidance rather than commercial purposes.

To follow the progress of this measure, see Private client tax legislation tracker 2013-14: Dual employment contracts.

(See TIIN, Artificial use of dual contracts by non-domiciles, HM Treasury: 2014 Budget, paragraph 2.91 and Overview, paragraph 1.61.)

The government has confirmed that the measures on which it has previously consulted (see Legal update Draft Finance Bill 2014 legislation: key business tax measures: Offshore intermediaries and Tax legislation tracker: employment: Review of employment intermediaries), aimed at ensuring that the correct amounts of tax and national insurance contributions are accounted for by or on behalf of offshore intermediaries that supply workers to employers in the UK, will by contained in the Finance Bill 2014 and will have effect from April 2014.

(See HM Treasury: 2014 Budget, paragraph 2.195 and Overview, paragraph 1.55.)

Legislation will be included in the Finance Bill 2014 to correct a defect in the split year rules that were introduced as part of the new statutory residence test by Schedule 45 to the Finance Act 2013. The legislation will ensure that capital gains accruing to a remittance basis user in the overseas part of a split year are not charged to capital gains tax if remitted during the UK part of the year.

For information on the statutory split year rules, see Practice note, Statutory residence test for individuals: Split year treatment.

(See HM Treasury: 2014 Budget, paragraph 2.85 and Overview, paragraph 1.15.)

The Finance Bill 2014 will introduce a power for HM Treasury to use secondary legislation to create income tax (and corporation tax) exemptions for major sporting events.

Currently, the government creates exemptions in a Finance Bill. For example, the Finance Bill 2014 will include an income tax exemption for any income received by a non-UK resident sportsperson as a result of their performance at the Glasgow Grand Prix 2014, or as a result of activity between 5 and 14 July 2014 to support or promote the event. This exemption is similar to those provided for other events in 2013 and 2014 (see Private client tax legislation tracker 2012-13: Glasgow Commonwealth Games: non-resident competitors and London Anniversary Games: non-resident competitors).

(See TIINs, Major sporting events: power to provide for tax exemptions and Glasgow Grand Prix, HM Treasury: 2014 Budget, paragraphs 2.72 and 2.73 and Overview, paragraphs 1.12 and 1.13.)

Legislation will be introduced in the Finance Bill 2014 to include payments that farmers (including farming companies) receive under the new EU Basic Payment Scheme among the list of assets eligible for business asset roll-over relief under sections 152 to 159 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992). The measure will have effect for payments received on or after 20 December 2013.

This legislation is necessary to ensure that farmers are entitled to the same relief from CGT for payments received from the new EU agricultural subsidy scheme, since its introduction in December 2013, as they were for payments received under the predecessor Single Payment Scheme, which will cease in 2014.

(See TIIN: Capital gains business asset roll-over relief, HM Treasury: 2014 Budget, paragraph 2.84 and Overview, paragraph 1.19.)

The government has published for comment, measures to prevent charities established for the purpose of tax avoidance from being entitled to claim charity tax reliefs, see Legal update, New measures proposed to combat charities being set up to avoid tax. The deadline for comment is 11 April 2014. HMRC appears to have struggled with the drafting of these measures and no timetable for introducing them has been set. The government has said that "any required legislation will follow at an appropriate time". To follow the progress of these proposals, see Private client tax legislation tracker 2013-14: Charity avoidance vehicles.

(See HM Treasury: 2014 Budget, paragraph 2.191 and Overview, paragraph 1.67.)

Legislation will be introduced in the Finance Bill 2015 to establish a framework to allow non-charity intermediaries (such as text donation operators or websites) to take a greater role in operating Gift Aid. The aim is to reduce the number of times a new Gift Aid declaration is given and to make it easier to claim Gift Aid on digital giving.

The measure will provide the government with broad powers to introduce detailed rules in regulations, establishing the roles and regulatory regimes for such intermediaries. The government will consult on the regulations before introducing them after the Finance Bill 2015 receives Royal Assent. For further detail, see Private client tax legislation tracker 2013-14: Gift Aid: new ways of giving.

This announcement follows HM Treasury's 2013 consultation on modernising Gift Aid, which sought views on simplifying the Gift Aid declaration and developing a universal Gift Aid declaration database. No announcements were made in the 2014 Budget on these.

(See HM Treasury: 2014 Budget, paragraph 2.91 and Overview, paragraph 2.29.)

The government will work with stakeholders to review the rules that determine the treatment of benefits that a donor may receive from a charity in connection with a donation, with a view to simplifying them. Any legislation will be in a future Finance Bill. For details of the current donor benefit rules, see Practice notes, Gift Aid: benefits in exchange for donations and Charitable gifts by companies: an overview: Gifts of money: donor must not receive significant benefits from the charity in return.

(See HM Treasury: 2014 Budget, paragraph 2.96 and Overview, paragraph 2.31.)

The government will encourage more donors to claim Gift Aid on eligible donations and encourage smaller charities to register for the reliefs they are entitled to. Its plans include carrying out targeted outreach work (we understand that a small charities outreach team will be set up in HMRC), improving understanding of donor behaviour and a simpler process to apply to both register with the Charity Commission and with HMRC (we assume this means taking forward the previously announced joint registration portal, see Private client tax legislation tracker 2013-14: Charity registration portal).

(See HM Treasury: 2014 Budget, paragraph 2.92.)

The rate of income tax relief available on the amount of investment by an individual under the social investment tax relief scheme has been confirmed at 30% from 6 April 2014. This rate was favoured by Big Society Capital and will enable eligible social enterprises to receive €344,827 (around £290,000) of tax-advantaged investment over 3 years under the scheme.

Legislation providing a range of income and capital gains tax reliefs to encourage individuals to invest in social enterprises will be included in the Finance Bill 2014. Draft legislation will be published on 27 March 2014. For further detail, see Private client tax legislation tracker 2013-14: Social investment tax relief.

(See HM Treasury: 2014 Budget, paragraphs 1.118 and 2.76 and Overview, paragraph 1.11.)

The following will be introduced in the Finance Bill 2014 with no changes made to the final legislation following consultation, except small, technical amendments:

(See HM Treasury: 2014 Budget, paragraphs 2.97 and 2.182 and Overview, paragraph 1.77.)

Practitioners will be pleased to note that HMRC has specifically recognised that an arrangement whereby a charity's trading subsidiary returns profits from its trading activities to the charity under a deed of covenant or the Gift Aid scheme will not of itself be considered to be tax avoidance for the purpose of the new anti-avoidance legislation relating to the transfer of corporate profits (see Legal update, 2014 Budget: key business tax announcements: Avoidance schemes involving the transfer of corporate profits). HMRC has confirmed that the subsidiary and the charity are “both taking advantage of tax reliefs which are intended to be used this way”.

(See HMRC: Guidance on avoidance schemes involving the transfer of corporate profits: Technical note, paragraph 41, Example 6 – Charitable subsidiaries).

The government confirmed that legislation will be introduced in the Finance Bill 2014 to empower HMRC to require taxpayers to make accelerated payment of tax in avoidance cases where the same (or a similar) scheme or tax arrangement has been judicially defeated in another party's litigation.

Draft legislation was published for consultation in January 2014 (see Legal update, Tax avoidance schemes: judicially defeated schemes and extended information powers: Finance Bill 2014 clauses).

As expected, the legislation is to take effect from the date that the Finance Bill 2014 receives Royal Assent and will apply to all cases where there is an open enquiry or open appeal after the date of Royal Assent. To follow the progress of this measure, see Private client tax legislation tracker 2013-14: DOTAS: high-risk promoters, defeated schemes and prescribed information.

(See TIIN: Amendment of return to take account of relevant judicial ruling and accelerated payments of tax in follower cases, HM Treasury: 2014 Budget, paragraph 2.188 and Overview, paragraphs 1.63 and 1.64.)

The government confirmed that provisions will be included in the Finance Bill 2014 to require taxpayers, for whom there is an open enquiry or matter under appeal, to pay disputed tax up front where the taxpayer has claimed a tax advantage by the use of arrangements that fall to be disclosed under the DOTAS rules or HMRC counteracts the tax advantage under the GAAR. (For the DOTAS and GAAR rules, see Practice notes, Disclosure of tax avoidance schemes under DOTAS: direct tax and General anti-abuse rule (GAAR).)

The proposal to widen the circumstances in which HMRC will require taxpayers to pay disputed tax up front in avoidance cases was announced in January 2014 (see Legal update, Tax avoidance schemes: judicially defeated schemes and extended information powers: Finance Bill 2014 clauses: Accelerated payments: DOTAS and GAAR schemes and Accelerated payment of disputed tax: judicially defeated schemes).

Draft legislation to implement this measure has yet to be published but is expected in the Finance Bill 2014 to be published on 27 March 2014.

The measure will have effect from the date the Finance Bill 2014 receives Royal Assent. In its original announcement, HMRC confirmed that it will issue a list of DOTAS schemes for which an accelerated payment notice will be issued. Payment of the disputed tax will be required within 90 days (presumably, from the date HMRC issues the notice) or, if taxpayers ask HMRC to reconsider the amount of the payment, within 30 days (again, presumably, from the date HMRC issues the fresh or confirmatory notice). Late payment will give rise to penalties. If the taxpayer is ultimately successful, HMRC will repay the disputed tax with interest. To follow the progress of this measure, see Private client tax legislation tracker 2013-14: DOTAS: high-risk promoters, defeated schemes and prescribed information.

(See TIIN: Accelerated payments of tax associated with schemes covered by the DOTAS rules or counteracted under the GAAR, HM Treasury: 2014 Budget, paragraphs 1.200, 1.201 and 2.188, Overview, paragraph 1.64 and HM Government: Budget 2014: policy costings, page 36.)

The government confirmed that legislation will be introduced in the Finance Bill 2014 to implement the high-risk promoters proposals consulted on in January 2014. Under the proposals, HMRC will be empowered to issue "conduct notices" to promoters who meet a threshold condition, and monitor promoters who breach a condition of the notice. A monitored promoter will be subject to new disclosure obligations, may be named by HMRC and will be required to inform clients that they are monitored and of their promoter reference number. For further details of the proposals, see Legal update, Tax avoidance schemes and high-risk promoters: Finance Bill 2014 clauses. The government has confirmed that, following the consultation, the definitions, appeal rights, and the threshold conditions have been revised. Revised draft legislation has yet to be published and is expected in the Finance Bill 2014 to be published on 27 March 2014. To follow the progress of this measure, see Private client tax legislation tracker 2013-14: DOTAS: high-risk promoters, defeated schemes and prescribed information.

The government also confirmed that measures to improve the direct tax DOTAS regime (as to which, see Practice note, Disclosure of tax avoidance schemes under DOTAS: direct tax) will be introduced in secondary legislation and in the Finance Bill 2015. The improvements will include measures to refine existing, and introduce new, hallmarks, and to strengthen the penalties for non-disclosure. Additionally, the government will consult on changes to the VAT disclosure regime (as to which, see Practice note, VAT disclosure regime), to align it more closely with the DOTAS regime.

(See HM Treasury: 2014 Budget, paragraphs 1.202, 2.187, 2.189 and 2.190 and Overview, paragraphs 1.62, 2.27 and 2.28.)

The government will introduce a new online system to enable taxpayers in financial difficulty to set up a payment plan for self-assessed income tax. However, it has yet to announce details of the new system and the time-frame for its introduction.

For information on the current HMRC advice to taxpayers experiencing problems with paying income tax on time, see HM Revenue & Customs: What to do if you can't pay your tax bill and GOV.UK: If you can't pay your tax bill on time.

(See HM Treasury: 2014 Budget, paragraph 2.206.)

The Finance Bill 2015 will allow HMRC to recover tax and tax credit debts of £1,000 or more directly from taxpayer bank and building society accounts, including individual savings accounts (ISAs). These powers will be subject to rigorous safeguards.

The government will consult on the draft primary and secondary legislation on the implementation of the measure, including safeguards to prevent hardship.

This measure will modernise and strengthen HMRC’s powers to recover tax and tax credit debts. It will focus on debtors who owe at least £1,000 and have been contacted multiple times by HMRC to pay and have refused to do so. A minimum aggregate balance of £5,000 will be left across all accounts, including ISAs, after the debt is recovered. The government will consult on the implementation of this measure shortly after the 2014 Budget.

As announced by the Chancellor in his 2014 Budget speech, this is an approach already used in other Western tax regimes. It is paramount that this system is implemented safely and without compromising the rights and welfare of taxpayers or the integrity of the financial institutions, especially since the government recognises that the main risk is the matching of debtors to bank and building society details.

(See HM Treasury: 2014 Budget, paragraph 2.203, Overview, paragraph 2.30 and HM Government: Budget 2014: policy costings, page 39.)