Homeowners who rent out their property on sites such as Airbnb face having their income automatically declared to the taxman under a digital crackdown proposed by ministers. As part of a consultation launched last week the Treasury said that it was considering forcing online platforms to provide details of users’ income directly to HM Revenue & Customs, or even taking the money at the source (AirBnB).
The move could affect not only those renting out properties or rooms but also car-share schemes and self-employed workers.
IFS warns taxes must go up
Britain needs ‘£30bn of new tax rises’ to hit the deficit target. The IFS says Britain won’t hit its target of eliminating the deficit by mid-2020s unless taxes go up and spending is slashed. The IFS’s verdict might come as a nasty surprise to punters, who woke up to the promise of tax cuts last week. But as the BBC’s Laura Kuenssberg pointed out, some politicians have been suggesting taxes may have to rise to cover the NHS’s demands. Economics journalist Dharshini David points out that Britain might actually need to raise more than £40bn in extra taxes (£30bn to eliminate the deficit, plus £11bn to address the ageing population). That’s a substantial bill for each adult. The Treasury, though, has responded to the IFS’s analysis, pointing out that the deficit has fallen steadily in recent years.
EU crackdown on tax avoidance
Banks, accountants and law firms that facilitate offshore tax schemes face a Europe-wide crackdown, according to a leak of draft legislation. Brussels will publish proposals to force financial intermediaries to automatically disclose any new cross-border tax schemes offered to clients. Those designing and promoting aggressive avoidance structures will have five working days to file details with their local tax authority. The new directive covers schemes for all types of direct taxes, including capital gains, corporate, inheritance and personal income
Childcare voucher deadline extended
The deadline for joining the childcare vouchers scheme has been extended by six months. Earlier this year, a petition asking the government to keep the scheme open alongside tax-free childcare attracted more than 100,000 signatures. The employer-backed voucher scheme — which offers parents vouchers worth up to £55 per week to help pay for childcare — had been due to close to new entrants on April 5. This has now been extended to October, though no exact date has been set. Parents can use the scheme to sacrifice up to £55 per week from their pre-tax salary and allocate it to pay for childcare.
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