Miscellaneous issues

Retirement age and state pensions

The state pension age (SPA), from which individuals can receive the state pension, is currently 65 for men and is rising to 65 for women. Legislation is already in place to increase the SPA to age 66 for everyone from 2026, but the Government wishes to bring this date forward. The Government will consult soon on how it will phase out the default retirement age from April 2011.

From April 2011, the state pension will be increased each year by the rise in earnings, or prices, or 2.5%, whichever is the highest. The consumer prices index (CPI) will be used as the measure of prices in the standard minimum income guarantee and basic state pension; however, the uprating of the basic state pension in April 2011 will be based on the retail prices index (RPI).

The guarantee given under the pension credit will be increased by the same cash amount as the state pension.

Insurance premium tax (IPT)

The standard rate of IPT will increase from 5% to 6%, and the higher rate will rise from 17.5% to 20% on 4 January 2011, in line with the increase in the standard rate of VAT.

HMRC powers

New penalties will be introduced for the late filing of returns for VAT and various other duties. The implementation of these penalties will take some years.

Measures to complete the reform of HMRC powers to check compliance with various excise duties are to be introduced over a period from April 2011 to April 2012.

Tackling tax avoidance

The Government will consider whether a general anti-avoidance rule (GAAR) would be effective in reducing tax avoidance. It will also consider:

• Bringing inheritance tax on trusts within the disclosure of tax avoidance schemes (DOTAS) regime.
• Manipulation of consortium relief.
• The use of employee trusts, including employer-financed retirement benefit schemes (EFRBS).
• Stamp duty land tax on high value property transactions.

Consultation

The Government has announced that it will be consulting about future changes in a number of areas. These include: the PAYE system, intellectual property, research and development expenditure, non-domiciled individuals, stamp duty land tax, managed service companies (IR35), investment and asset management issues and gift aid.

Tax policy making

The Government has announced that it will be considering ways to provide taxpayers with greater clarity and certainty in its approach to tax policy. This includes an intention to create an independent Office of Tax Simplification.