Category: Press Releases

The press release issued by HM Treasury on 19 December 2022.

Self-employed individuals and landlords will have more time to prepare for Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA), following a government announcement today (19 December 2022).

Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the government is giving a longer period to prepare for MTD. The mandatory use of software is therefore being phased in from April 2026, rather than April 2024.

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.

The government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.

Mandation of MTD for ITSA will not be extended to general partnerships in 2025 as previously announced. The government remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in the government’s tax administration strategy.

Victoria Atkins, Financial Secretary to the Treasury, said:

It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.

Jim Harra, Chief Executive and First Permanent Secretary, HM Revenue and Customs, said:

HMRC remains committed to the delivery of Making Tax Digital as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.

A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.

The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.

The press release issued by HM Treasury on 17 September 1998.

Up to date independent analysis showing Britain’s low levels of productivity was highlighted today by Chief Secretary Stephen Byers. Speaking to a New Statesman conference on the “Radical Century” he said:

“Tackling Britain’s productivity gap is an important national challenge. In meeting this challenge, we are confronting one of the most fundamental longstanding weaknesses of the British economy.

“The Government’s productivity agenda is a key part of modernising our economy. It is not about working harder but about working better.

“The present productivity gap means that our prosperity and living standards are being held back. Increased productivity is fundamental to the improvement of our living standards in the UK and our ability to build a decent and fair society for all.”

The figures from independent management consultants McKinsey confirm that:

•  Britain has a productivity gap of 40% with the USA and 20% with both Germany and France
• the problem effects both manufacturing and services.  Britain’s productivity is 50% behind Japan in car manufacturing but also 50% behind the USA in industries like hotels and telecoms.
• there is very low physical investment – UK capital intensity is 20% behind the USA.
• over the last international economic cycle for every 100 Pounds per worker invested by the UK the USA invested 140 Pounds  and France 150 Pounds.

The press release issued by HM Treasury on 14 September 1998.

Finance Ministers and Central Bank Governors of the G7 countries have been in close contact over the last few days to discuss developments in the world economy and global financial markets and to explore ways to respond to the challenges now facing the  international financial system.

In light of the exceptional pressures in financial markets and deteriorating prospects for growth in many parts of the world, the Ministers and Governors agreed on the following approach.

First, they agreed that inflation is low or falling in many parts of the world. They welcomed some encouraging developments as regards domestic demand growth in continental Europe. Nevertheless, in view of the slowdown in demand in a number of economies, especially among emerging market economies, the balance of risks in the world economy had shifted. They emphasised their commitment to preserve or create conditions for sustainable domestic growth and financial stability in their own economies. In this context, they noted the importance of close cooperation among them at this juncture.

Second, the Ministers and Governors welcomed the courageous measures taken in many emerging economies and the significant progress made in laying the foundation for stability and recovery. They agreed to explore ways to reinforce the existing programmes, in support of growth-orientated policies, with accelerated efforts to promote comprehensive programmes for corporate and financial sector restructuring, improved transparency of policy-making. In addition, they agreed to consider measures to alleviate the effects of the crisis on the poorest segments of society, including if necessary through the provision of augmented financial assistance centred in the multilateral development banks.

Third, the Ministers and Governors emphasised that the adverse developments in the external environment make it particularly important that countries take appropriate steps to strengthen policies and improve confidence. Countries that embrace unilateral action on debt as a substitute for reform and cooperation hurt the prospects for their own economies and the world system.

Fourth, the Ministers and Governors agreed to support a cooperative international approach to support those countries that have been adversely affected by recent developments in global markets and which are implementing strong economic programmes. They expressed concern about the extent of the general withdrawal of funds from emerging markets without respect to the diversity of prospects facing those countries and the significant progress that has been made in many countries in carrying out strong macroeconomic policies and structural reforms that enhance long-term growth prospects. They agreed on the urgency of the early implementation of the IMF quota increase and establishment of the New Arrangements to Borrow.

Finally, they agreed to continue to support the provision of financial assistance from the IMF, which will remain at the centre of the system, in support of strong policies, and including in parallel with the private sector. In this context, they drew attention to the possibility, if circumstances so warrant, of activating the General Arrangements to Borrow, in consultation with other participants in the arrangements. They also support an active role for the World Bank and the other MDBs in cooperating with and providing finance and technical assistance to support their member economies in this difficult time, with a particular focus on support for the vulnerable groups in society and for financial sector restructuring.

The Ministers and Governors will continue to consult closely among themselves and with the major financial institutions in their countries that have a key interest in the smooth and efficient operation of markets and promotion of financial stability.

The press release issued by HM Treasury on 14 September 1998.

Patricia Hewitt Welcomes Changes to the Banking Code Better information for savers about changes to savings accounts has been welcomed by the Economic Secretary Patricia Hewitt.

The welcome follows an announcement by the British Bankers’Association (BBA) and the Building Societies Association (BSA)that there will be changes to the Banking Code which will ensure customers get proper information on changes affecting savings accounts.

The main changes include:

• a guarantee of 30 days notice of changes in terms  and  conditions and a 60 day waiver of notice for customers  who do not like the changes;
• a 14 day cooling off period when customers open new  savings accounts;
• better written information for people with postal or
  telephone based accounts;
• an annual written summary of all available accounts, for  all customers; and
• an end to obsolete and superseded accounts.

Welcoming the changes, Ms Hewitt said:

“This is really good news for savers. It is only right and proper that customers have full and up to date information on the terms and conditions of their accounts.

“We want to ensure that customers are provided with clear and accurate information so they have confidence in the decisions they take when dealing with their bank or building society.

“I welcome in particular the new rules on periods of notice,
the introduction of cooling-off periods, and the abolition of
obsolete and superseded accounts.”

NOTES TO EDITORS

1. On 7 May 1998, following a meeting with David Davis MP, the former Economic Secretary Helen Liddell asked Treasury officials to investigate press reports that banks were not dealing fairly with customers over changes to interest-bearing accounts.

Subsequently, Mrs Liddell asked the industry to tighten up the Banking Code.

2.  The BBA and BSA have now agreed the following changes to the Banking Code:

• better information to customers on how they will be informed of interest changes;
• a 14 day cooling off period when customers sign up to a new account;
• a guaranteed 30 days notice for changes in account termsand conditions;
• a 60 day waiver of notice, if customers do not like the changes to their account conditions;
• clear messages on interest changes to all customers,including written notices to those with postal and telephone accounts;
• an annual summary of all accounts offered, for all customers; and
• abolition of superseded and obsolete accounts.

The press release issued by HM Treasury on 9 September 1998.

Paymaster General Geoffrey Robinson today welcomed the long awaited publication of the ASB’s guidance on accounting for Private Finance Initiative (PFI) contracts.

Mr Robinson said:

“When we took office I was determined that the PFI  should be reinvigorated.   One of  the key problems spotlighted in the review I commissioned from Malcolm Bates was the absence of clear accounting guidance and in response the Treasury  published interim guidance on the accountancy treatment of  PFI  transactions last September”.

“Since then, we have worked closely and constructively with the ASB and there has been a convergence of views.  I welcome and accept the principles  published today by the ASB, giving greater clarification about how the asset underpinning the service to be delivered should be accounted for.”

“I am putting in hand the preparation of new guidance that will apply these principles in a way that will ensure consistency and cost effective compliance throughout the public sector.  We shall  be consulting widely with the Office for National Statistics, accounting profession, the public sector and contractors. The aim will be to make the new guidance effective from 1 January 1999.  Until then the existing Treasury guidance will continue to apply.”

“There will be  no  retrospective changes to signed deals and those out to “Best and Final Offers” will not be affected.  For newer projects, even with good procurement and delivery times, any changes following the new principles would not have a significant impact until after 2001 – 02 at the earliest.

“Above all, PFI is driven by value for money and not by the accounting treatment.”

The approach taken in the Application note is not dissimilar to that contained in the Treasury’s own guidance.  The main difference is that the ASB considers that judgements about capitalisation should  exclude those  stemming purely from the service.  During the period of consultation the Board has clarified its position to indicate  a broader view of the interaction between service risks and the design, construction and operation of the asset.

The Treasury’s initial view, given the broadening of view taken on asset related risks in the Application Note, is that substantially all the risks transferred to the private sector  will continue to be recognised in the determination of accounting treatment. While neither HM Treasury nor those drafting the Application note have worked out how their principles will be applied in practice, the Treasury does not expect capitalisation judgements to change greatly and that the  private sector contractor’s ownership of the asset will in most instances continue  to be recognised.