Tax consultations round-up
Charlotte Barbour summarises recent ICAS responses to tax consultations.
Sunday supplements may be publishing their reading lists but for the tax practitioner there is an alternative list. HMRC, and others, have been issuing a number of consultation documents and there is reading for both general practitioners and specialists. There is plenty of choice.
There has been a flurry of consultation documents relating to the work of the Office of Tax Simplification (OTS) on employee benefits and expenses, although one wonders why HMRC needs to issue three consultations on how to abolish trivial benefits, the 'higher paid' threshold of £8,500 and an exemption for paid or reimbursed expenses. There are also papers asking about payrolling benefits, about travel and subsistence, one on the wider topic of employment status and another about remuneration practices. Of course, many of these issues would fade into the background if the fundamental issue was tackled, the amalgamation of income tax and national insurance, and ICAS continues to call for a road map that shows the government's overall objectives with employment tax and how this should be achieved. Government policy should aim to streamline the treatment of self-employment and employment across tax, NIC and employment legislation.
For those who advise private clients where is a raft of choice ranging from the continuing attempts by HMRC to change the taxation of trusts, which started a couple of years ago with the aim of 'simplification' but this year's consultation now offers a 'fairer way of calculating trust charges'; there are prospective changes for non-residents whether this is to charge CGT on gains made on any UK residential property or restricting their entitlement to the UK personal allowance. Some consultations need to be read even though they may not appear to be relevant because they have a wider impact than the title may suggest, for example, in the CGT for non-residents there is a question about abolishing the private residence relief election. ICAS has said that there may be good policy reasons to review private residence relief but that this should not simply be as a side issue of extending CGT to non-residents. Consultations on aspects of VAT also extend more widely than may be initially thought whether its changes to VAT on prompt payment discounts that will affect accounting systems or the MOSS mini shop.
Anti-avoidance measures continue to feature in the consultations, with HMRC seeking views on proposals to further strengthen Disclosure of Tax Avoidance Schemes and how the VAT Disclosure Regime might be updated. In relation to evasion of tax HMRC is seeking views on a new strict liability criminal offence of failing to declare taxable offshore income and gains and also consulting regarding options to strengthen civil sanctions for those evading tax by hiding taxable income, gains and assets offshore.
It is not only HMRC that is issuing consultations that are relevant to tax practitioners. The OTS continues its work programme and has asked for further input to its review of partnerships. It is also instigating a review of penalties to consider whether penalties could be simplified, made more consistent and more effective in successfully driving compliant behaviour. In their favour, OTS papers tend to be very brief and to the point simply listing their questions.
And regardless of the referendum outcome, in Scotland the programme to implement the devolved taxes, LBTT and SLfT, is on-going. This is relevant to anyone, where ever they are, if they undertake a land transaction in Scotland, from 1 April 2015 onwards. The Scottish Government is consulting about related subordinate legislation, such as measures to include licences within the LBTT regime (in the same manner as leases) and a proposal for sub-sale relief, which is proposed as a 'pay now but get relief later' basis. A significant amount of regulations, guidance and tribunal rules that support the Revenue Scotland and Tax Powers Bill are also expected to be issued during the autumn for consultation.
The ICAS Tax Committee and its sub-Committees will be considering these numerous consultations; some of the proposals will be discussed in meetings with the relevant authorities; and formal responses will be prepared. However, in order to fully represent your views please tell us.
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