Author: Glenn

From 6 April 2025, the remittance basis of taxation will be scrapped in favour of a residence-based system. A new 4-year Foreign Income and Gains regime offers tax relief for new arrivals, while transitional measures aim to ease the shift. Here’s what’s changing.

Effective from 6 April 2025, the remittance basis of taxation for non-UK domiciled individuals will be replaced by a simplified, residence-based tax regime.

Additionally, the government will introduce a 4-year Foreign Income and Gains (FIG) regime. Under this regime, individuals newly arriving in the UK who choose to participate will receive full relief (100%) on foreign income and gains during their first four years of UK tax residence, provided they have not been UK tax resident in any of the preceding 10 consecutive years.

As a transitional measure for Capital Gains Tax (CGT) purposes, individuals who have previously used the remittance basis will have the option to rebase personally held foreign assets to their value as of 5 April 2017, provided certain conditions are met.

Furthermore, Overseas Workday Relief will be extended to cover a 4-year period, in line with the new 4-year FIG regime. This change will eliminate the need for individuals using this relief to keep their employment income offshore. From 6 April 2025, the maximum amount of Overseas Workday Relief that can be claimed annually will be the lesser of £300,000 or 30% of the individual's net employment income.

A new Temporary Repatriation Facility (TRF) will also be introduced from April 2025 for a 3-year period. This facility will allow individuals who have previously been taxed on the remittance basis to designate and remit foreign income and gains that arose prior to the reform, at a reduced rate. This includes foreign income and gains held within trust structures that have not been attributed. The TRF will offer a rate of 12% for the first 2 years, and 15% in the final year of its operation.

The Employment Appeal Tribunal (EAT) upheld claims of constructive dismissal and disability discrimination against Whyte & Mackay Limited (W&ML) in the case of Mr. Duployen , a former forklift truck and warehouse operator, following his termination.   

W&ML had appealed the ET's decision on several grounds, seeking reinstatement or re-engagement, a higher award for injury to feelings, and any interest due on the awards. However, reinstatement proved impracticable due to the breakdown in relations and, while theoretically possible, it was not reasonable given the circumstances. Although the issue of re-engagement, while not addressed by the ET, is a required step per Sections 113 and 116 of the Employment Rights Act (ERA) 1996, tribunals are not compelled to order either a reinstatement or re-engagement, even though they have the discretion to do so.

The tribunals found that the appellant suffered embarrassment, humiliation and distress as a consequence of the discriminatory treatment by the respondent with a detrimental impact on his mental health.  

This is a cautionary tale for employers and HR departments alike, and the letter of the law should be followed diligently in terms of the Employment Rights Act (ERA) 1996, the ECHR, and the Human Rights Act (HRA) 1998 to avoid claims of discrimination or constructive dismissal, especially given that not all handicaps or disabilities are self-evident.

In a significant move to enhance trust in online reviews, Google has agreed to implement substantial changes to combat fake reviews, following an investigation by the UK's Competition and Markets Authority (CMA). This initiative aims to ensure consumers can rely on genuine feedback when making purchasing decisions.

Background

The CMA launched an investigation into Google over concerns that it wasn't doing enough to detect and remove fake reviews, address suspicious behaviours, or properly sanction those involved in fraudulent review activities. Given that online reviews can significantly influence consumer spending—with estimates suggesting that up to £23 billion of UK consumer spending is potentially swayed by online reviews annually—ensuring their authenticity is crucial.

Google's Commitments

In response to the CMA's concerns, Google has committed to several key actions:

• Enhanced Detection and Removal: Google will implement rigorous steps to identify and eliminate fake reviews swiftly.
• Sanctions for Offenders:
  • Reviewers: Individuals who repeatedly post fake or misleading reviews about UK businesses will have their reviews deleted and will be banned from posting new ones, regardless of their location.
  • Businesses: Companies found to be artificially boosting their star ratings through fake reviews will have prominent 'warning' alerts added to their Google profiles. Additionally, their review function may be deactivated, preventing new reviews. Repeat offenders could see all their reviews from the past six months or more deleted.
• User Reporting: Google will establish a robust reporting system, allowing consumers to easily flag concerning reviews, including those where incentives were offered in exchange for positive feedback.

To ensure compliance, Google will report to the CMA over a three-year period. This move is part of a broader effort to promote fair practices online and protect consumers from misleading information.

The UK government offers a robust safety net for savers through the Financial Services Compensation Scheme (FSCS). This scheme is designed to protect individuals, small businesses, and charities if a bank, building society, or credit union fails, ensuring greater financial security and peace of mind.

How the Scheme Works

The FSCS guarantees deposits of up to £85,000 per person, per authorised institution. For joint accounts, the protection doubles to £170,000, as each account holder is covered individually. This means that if your bank or financial institution collapses, you will not lose your money up to this limit.

Temporary High Balances

In certain situations, the FSCS provides additional cover for temporary high balances, such as when you’ve recently sold a house, received an inheritance, or a large insurance payout. These balances are protected up to £1 million for six months, offering reassurance during significant life events.

Eligibility and Scope

The FSCS covers accounts held in UK-authorised institutions, including current accounts, savings accounts, ISAs, and certain fixed-term deposits. However, it’s essential to check that the Prudential Regulation Authority (PRA) regulates your bank. Many banks operate under the same authorisation, so splitting funds between accounts at institutions under one licence won’t increase your protection.

Beyond Deposits

While the FSCS is best known for protecting deposits, it also covers investments, insurance, and pensions under specific terms. However, these protections are subject to separate limits and conditions.

Why It Matters

The FSCS strengthens trust in the UK’s financial system, ensuring that consumers feel confident about saving and investing. For more detailed information, you can visit the FSCS website or check your bank’s coverage status directly.

The scheme stands as a cornerstone of financial stability, giving UK savers valuable protection in uncertain times.

Gift Aid transforms charitable donations by allowing charities and CASCs to claim 25p extra for every £1 given—at no additional cost to you. Higher and additional rate taxpayers can also claim valuable tax relief, making giving even more rewarding.

Higher and additional rate taxpayers can claim tax relief on the difference between the basic rate of tax and their highest rate. This can be done through their self-assessment tax return or by requesting HMRC to adjust their tax code.

Example: 

If a taxpayer donates £1,000 to charity, the total value of the donation to the charity is £1,250. The taxpayer can claim additional tax relief based on their tax rate:

• £250 if they pay tax at 40% (£1,250 × 20%)
• £312.50 if they pay tax at 45% (£1,250 × 25%)

It is important to ensure that the taxpayer has paid enough tax in the relevant year. Donations will qualify for tax relief as long as the total claimed does not exceed four times the amount of tax paid in that year. If more tax relief is claimed than entitled, the taxpayer must notify the charity and repay the excess to HMRC.

Additionally, taxpayers can make donations directly from their wages through a payroll giving scheme if their employer operates one approved by HMRC. This allows donations to be made tax-free from salary or pension payments.