The recently published Finance Act 2008 still leaves many questions unanswered

The Finance Act sets out the new regime for record keeping for businesses as well as the extension of the new penalty regime for incorrect tax returns, although detailed guidance on the record keeping requirements is awaited. The good news is that paper can be dispensed with, provided companies have adequate electronic equivalents.

In terms of the new penalty regime, it is allegedly going to help those who try their best to get their returns correct and penalise those who do not. The crux of the regime is being able to demonstrate that 'reasonable care' has been taken. This means that large employers will find it more difficult to claim negligence, as will smaller employers who do not seek help. You can seek help from HM Revenue and Customs (HMRC), or alternatively from your accountant!

There is also clarification on the new provisions for 'non-doms', although HMRC is finalising the guidance for the way that equity compensation will be subject to tax and NIC following the changes. The current expectation is that detailed guidance should be ready by early August.

One major change is the application of Extra Statutory Concessions (ESCs) eg ESC A11 - the split year concession. The Finance Act 2008 contains provisions to rewrite ESCs as part of the statute law. Which ones survive is a much awaited conclusion as there are hundreds of ESCs.

Which questions remain unanswered?

The last 12 months have seen a flurry of announcements setting out new interpretations of existing legislation. Statutory clarification on these would have been most welcome. As it is, the uncertainty surrounding the rules about employer provided medicals and relief for late night taxis remains. The review of Approved Mileage Allowances, in the face of continuing fuel rises, was also noted, but unfortunately by its absence! In addition to ignoring the plight of those who are required to use their cars for their jobs, HMRC looks set to continue the purge against nurseries, salary sacrifices and the 'green' cycle to work scheme.

In summary, at a time when the economy is stuttering, there was little to alleviate the increasing burden on employers.

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