The project has now been in process for well over the initial optimistic five-year timetable. One new Act has been forthcoming and the second is on its way. The slow pace has meant some have simply forgotten it is ongoing but behind the scenes, an extremely painstaking and detailed review of the tax provisions has been taking place.
The latest Bill is now underway and available in draft. It covers employment income, pensions and taxable social security benefits and is known as the Income Tax (earnings & pensions) Bill. A final version of the Bill should reach its parliamentary stages by the end of this year and move on to the statute books in 2003.
The impact on tax advisers is that when this Bill is enacted we must learn the new section numbers which will replace many we have come to know (and love?) in the existing legislation relating to employment etc.
All those section numbers we could use to impress friends or cause dinner parties to disintegrate will change. For example, if the Bill is enacted as it appears in draft you would quote section 100, Income Tax (earnings and pensions) Act if advising on living accommodation benefits.
There will also be some new terminology, as many standard terms relating to employment income are changing. For example, ’emoluments’ is going.
It is proposed these are to be known as ‘earnings’, while ‘amounts treated as emoluments’ will become ‘general earnings’.
In short, anyone involved in tax advice needs to take a good look at new provisions before enactment to ensure they are fully up-to-date.
- Francesca Lagerberg is national tax director of Smith & Williamson.
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