The Corporation Tax Bill and the Taxation (International and Other Provisions) Bill have been published.  These Bills are the sixth and seventh produced by the Tax Law Rewrite project, which has rewritten a big chunk of UK tax law in recent years to make it clearer and easier to use. 

The Corporation Tax Bill (the second of two dealing with corporation tax) substantially completes the rewrite of the corporation tax code.  It includes provisions about losses and gifts to charities, various reliefs such as group relief, distributions, particular types of companies and activities, avoidance, and definitions.

The Taxation (International and Other Provisions) Bill includes provisions about double taxation relief, transfer pricing, advance pricing agreements and tax arbitrage.  It also relocates and where appropriate rewrites some provisions which would otherwise have been left unhelpfully in the Income and Corporation Taxes Act 1988 or one of the Finance Acts.

Yesterday, the Office for National Statistics (ONS) released provisional estimates of the public finances showing that in October 2009 the public sector had:

• a current budget deficit of £7.7 billion;
  
  
• net borrowing of £11.4 billion; &
  
  
• at the end of October, net debt was £829.7 billion, equivalent to 59.2% of gross domestic product.

UK "skint as a country"

On 1st January, the UK's VAT holiday will end as the tax rate returns to 17.5% from 15%.

M&S chairman Stuart Rose says we should expect another increase next year as the Government looks for ways to pay off the deficit.  "We are skint as a country," he said.  "The Treasury needs revenue so I would not rule it out ... this Government and the future Government have got to make some hard decisions about refilling the coffers".

Retailers, already squealing about the return to a 17.5% VAT rate, fear a further increase would kill off the recovery before it's begun. 

But the Guardian estimates a VAT increase to 20% would raise an additional £12 billion a year for the public purse.  And levying VAT on food - which is currently exempt - albeit at a lower rate of 5%, would bring in another £3.5 billion a year.

The majority of business rates tax bills - one million in total - will fall next year following revaluation, the Government has confirmed. 

Revaluation ensures the business rates each enterprise pays is fair and reflects changes in relative property values over time.

As a result of revaluation, 60% of business rates payers will see falls in their tax bills next year.  For the minority paying more, the Government has put in place a £2 billion relief scheme self funded by businesses that will limit and phase in increases.

Overall, as a result of revaluation and the relief arrangements, one million business properties will see an average decrease in the tax bills of £770 in 2010/11.

To reduce bureaucracy for small businesses and billing authorities, the Government has also announced that organisations do not need to re-apply for small business rate relief at revaluation, a move welcomed by the Federation of Small Businesses.

Other measures introduced by the Government to support businesses include enabling businesses to delay payment of corporation tax, VAT and other taxes; the Enterprise Finance Guarantee, helping businesses applying for bank loans; a £75million Capital for Enterprise Fund; Regional Loan Transition Funds from Regional Development Agencies; free business health checks; and a commitment from Government to pay suppliers within 10 days.

The Government has announced it plans to rename Council Tax Benefit as Council Tax Rebate as part of a campaign to encourage pensioners to claim the help they are entitled to.

Campaign groups, including the Royal British Legion, are concerned that pensioners are reluctant to claim a 'benefit.'  By renaming Council Tax Benefit as a 'rebate' they hope more pensioners will take up help.

Work and Pensions Secretary Yvette Cooper said today:

"Changing the name makes it clearer that many pensioners are entitled to this money back on their council tax rather than seeing it as a separate benefit that they may not want to claim.  We've listened to the Royal British Legion and others who've called for this change.  This is part of making sure people get proper support and respect when they retire."

Pubs, clubs, restaurants and other retail businesses remaining open past midnight on New Year's Eve will be allowed to continue charging VAT at 15% on their sales until they close or until 6am on 1 January 2010, whichever is the earlier, the Financial Secretary to the Treasury confirmed yesterday.

Similar arrangements will apply to telecommunications companies in respect of calls and texts made up to 6am on 1 January.

The tax-free ISA allowance increased £3,000 today, from £7,200 to £10,200, for savers born on or before 5 April 1960. 

Up to £5,100 of the new allowance can be saved in a cash ISA - an increase of £1,500 - and the remainder can be invested in a stocks and shares ISA with either the same or a different provider. 

Alternatively, the full £10,200 can be invested in a stocks and shares ISA with one provider.

Over 19 million people currently have an ISA.  The £3,000 increase will be extended to all savers, regardless of age, from 6 April next year.  The Government estimates the increase will ultimately benefit over five million people who currently use their full ISA allowance.

According to HM Revenue & Customs, thousands of taxpayers do not realise they qualify for Working Tax Credit; many believe that it is a limited tax credit for working families.  In reality, you do not have to have children to qualify for Working Tax Credit.

Am I eligible for Working Tax Credit?

Civil servant John Brian Agdomar, 42, from Hackney, East London, and an accomplice, Olanekan Omatayo Ogunmekan, 35, from Bethnal Green, London, have been jailed for four and a half years for conspiracy to commit tax credit fraud and acquiring criminal property under the Proceeds of Crime Act 2002. 

The pair fabricated more than 1,400 fictitious children, hijacked hundreds of identities and illegally claimed more than £1.2m in tax credits, before being rumbled by HM Revenue & Customs (HMRC) investigators last year.

The pair had developed a scheme which saw Agdomar using his job as a civil servant at the Department for Work and Pensions as a cover to illegally access genuine customer records to obtain personal information.  This allowed the pair to hijack existing claims for tax credits, diverting the payments into a complex network of bank accounts.

HM Revenue & Customs (HMRC) has increased the interest rates charged on late payments and paid on overpayments of tax.  The changes essentially harmonise interest rates across all taxes.

The rate changes include:

Anyone with undeclared offshore tax liabilities who fails to come forward under the New Disclosure Opportunity (NDO) faces an increased risk of prosecution, HMRC's Permanent Secretary for Tax, Dave Hartnett, warns in a new podcast launched today.

Under the NDO, people making a complete and accurate disclosure of their untaxed offshore liabilities between 1 September and 12 March 2010 will have any penalty capped at 10 per cent, or 20 per cent if they failed to take up a written offer of a capped penalty under HMRC's 2007 Offshore Disclosure Facility (ODF).

Once this disclosure window closes on 12 March 2010, those taxpayers who have not come forward but are found to have unpaid tax liabilities will face penalties of at least 30% rising to 100% of the tax evaded.  They also run a risk of criminal prosecution.