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Low emission lorries to pay lower levies
The government has confirmed plans to introduce a lower rate of the HGV road user levy for lorries that meet the latest Euro VI emissions standards. This measure is intended to incentivize vehicle operators to move towards newer, cleaner vehicles and to reduce emissions from HGVs and improve air quality. Lorries which meet the Euro VI standard produce 80% less nitrogen oxide emissions than many older vehicles.
Lorries that do not meet the latest emissions standard will pay a higher rate of the HGV road user levy. The changes are set to come into force on 1 February 2019. The levy was first introduced in 2014 to help ensure that those using heavy lorries on UK roads bore some responsibility for the wear and tear caused as well as the environmental impact.
The HGV levy is currently up to £10 a day or £1,000 a year and must be paid by all HGVs with a revenue weight of 12 tonnes and over before they use UK roads. The new measure will reduce the levy for Euro VI compliant HGVs by 10%. The levy will be increased for other vehicles by 20% except in cases where the levy is already set at its maximum rate allowable under European legislation.Read more..
New points-based late filing penalties
The Finance Bill 2018-19 draft legislation includes a new measure to introduce a points-based penalty system for certain regular (e.g. monthly, quarterly and annual) returns that are filed late. The introduction of a points system was first announced at Autumn Budget 2017 and will operate in conjunction with HMRC's Making Tax Digital (MTD) initiative.
The changes will initially apply to regular VAT and Income Tax self-assessment obligations. Corporation Tax late filing penalties are not included within the scope of the current proposed legislation. However, it is the government's intention to extend the new points-based penalty system to the Corporation Tax regime in due course. The government plans to roll-out the implementation of the new regime starting with VAT filing obligations from 1 April 2020. No timetable has yet been announced in relation to the introduction of the new penalties regime for Income Tax self-assessment.
Under the new system, a defined number of penalty points will be given where a regular tax filing is made late. The amount of penalty points will depend on several factors. When a taxpayer is given penalty points this will not mean an automatic penalty will
be levied. A penalty will only be levied when a pre-defined points threshold has been reached. The points issued will be set to expire after a fixed period of compliance by the taxpayer. There will also be a new process under which penalties and points can
be appealed and reviewed. HMRC will publish further details in due course. Presently, no penalty rates have been published.
HMRC security deposit regime to be extended
The security deposit legislation is to be extended to both Corporation Tax and Construction Industry Scheme (CIS) deductions from April 2019. The security deposit regime allows HMRC to require security from high-risk businesses where there is a serious risk that taxes owed will not be paid.
At present HMRC’s security deposit powers only apply to VAT, PAYE and National Insurance Contributions, Insurance Premium Tax (IPT) and some environmental and gambling taxes. This measure will give HMRC the power to require securities in relation to Corporation Tax and CIS deductions.
There are many reasons for non-payment of tax to HMRC including phoenixism where businesses evade tax by becoming repeatedly insolvent and a new company being set-up. These measures also target businesses that build up large debts to HMRC. The extension of these powers to Corporation Tax and Construction Industry Scheme (CIS) deductions will help target businesses that seek to fail to comply with their tax obligations.
The required security will usually be payable by electronic payment to a specified HMRC bank account, by cheque, by banker’s draft, a specified bank guarantee or by way of a payment into a joint HMRC/taxpayer bank account. The amount of security required is calculated on a case by case basis. If the business does not meet HMRC’s security deposit requirement they will have committed an offence and will be subject to a fine. Businesses required to pay a security deposit will have the option to appeal any decision by HMRC.Read more..