Tax consultations galore
Charlotte Barbour and Susan Cattell outline the tax consultations, calls for evidence and discussion documents published on ‘Tax Day’ 2021 and how ICAS plans to respond.
A busy year for tax
It is only March, but it already feels like a busy year for tax. So far, we have had a series of tax events:
- UK Budget – 3 March
- Finance Bill published – 11 March
- Tax Day – 23 March
There have also been separate spending announcements, some of which related to SEISS and CJRS and were therefore of particular interest to tax practitioners.
What is ‘Tax Day’?
Everyone is familiar with the traditional Chancellor’s Budget, but ‘Tax Day’ is an innovation for 2021. The government published a command paper ‘Tax Policies and Consultations (Spring 2021)’ which set out a range of tax-related announcements and was accompanied by the publication of consultations, calls for evidence and discussion documents.
We welcome the new ‘Tax Day’ and would like to see it become a regular feature – it proved to be a helpful way of separating the political and economic aspects of the Budget from the details of future tax proposals.
However, we would also like to see a return to an autumn Budget and the associated timetable for consultation, draft legislation and Finance Bill. ICAS supports the principles set out alongside this timetable in the 2017 policy paper ‘The new Budget timetable and the tax policy making process’. These were designed to increase predictability, stability and simplicity in the UK tax system and to address concerns that tax policy making was often piecemeal and reactive. A single autumn fiscal event is also essential to support the devolved nations in making effective tax policy.
Some widely expected consultations and proposals were not published on Tax Day, so it seems quite possible that there will be another tax event in autumn 2021!
ICAS will be responding to key Tax Day consultations and calls for evidence
The ICAS Tax Board, with its five technical committees, is responsible for putting forward the views of the ICAS tax community – sharing Members’ insights into complex tax issues and operational practicalities. ICAS also has a public interest remit, a duty to act not solely for its members but for the wider good.
We will be responding to the key consultations and calls for evidence published on Tax Day. Some of these were expected and ICAS has already held a number of useful pre-consultation conversations with HMRC – particularly around tax administration and raising standards of tax advice. We welcome Members’ views to inform our responses, by email to tax@icas.com.
Our immediate priority will be responses to the following four consultations and calls for evidence:
Notification of uncertain tax treatment by large businesses
This is the second consultation on the implementation of the requirement for large businesses to notify HMRC of uncertain tax treatments – which was delayed by 12 months until April 2022 in response to feedback about the original proposals. ICAS not only responded to the first consultation last year but also gave oral evidence about it to the House of Lords Finance Bill Sub-Committee.
Raising standards in the tax advice market: professional indemnity insurance and defining tax advice
This consultation seeks views on the definition of tax advice and a requirement to make PII compulsory for all tax advisers, with a view to improving tax advice and giving taxpayers better access to redress where they receive bad advice.
All ICAS Members in practice must have PII (with minimum requirements prescribed by ICAS). Clearly, this is a topic of interest to all Members offering tax advice and ICAS will continue to contribute to the debate about professional standards and how to raise standards amongst those who are not currently required to have PII.
The tax administration framework: Supporting a 21st century tax system
This call for evidence is crucial for everyone involved in tax compliance. It covers the the core legislation, processes and guidance which underpin obligations for HMRC, taxpayers, agents and third parties. The ambitious aim is to explore how to make tax more straightforward to pay and harder to get wrong, improve people’s experience of the tax system, and build and maintain trust between HMRC and taxpayers.
Timely payment
Another call for evidence to consider ‘the opportunities and challenges’ of more frequent payment of income tax within ITSA and corporation tax for small companies, based on in-year information. This will be of considerable interest to small businesses and their advisers and an opportunity to influence what the government suggests would be a gradual, long term reform process.
Other consultations and discussion papers
The ICAS technical committees will be discussing some of the other consultations and discussion documents - and ICAS responses may be submitted. Again, we welcome Members’ views.
- Helping taxpayers get offshore tax right: A discussion document seeking views on how to help taxpayers get their offshore tax right first time.
- Preventing and collecting international tax debt: A discussion document considering better ways to prevent and collect international tax debt.
- Transfer pricing documentation: Consultation on whether to update the requirements for businesses to maintain transfer pricing documentation.
- Reform of taxation of securitisation companies: Consultation on modernising the tax regime to reflect the developing market.
- Clamping down on promoters of tax avoidance: Consultation on a package of measures to tackle promoters, including measures aimed at supporting taxpayers to identify and exit tax avoidance schemes.
- Aviation reform: Consultation to consider how Air Passenger Duty could support Union and regional connectivity, alongside the commitment to reach net-zero emissions by 2050.
- Hidden economy conditionality – Northern Ireland and Scotland: Consultation on how to make the renewal of certain licences in Scotland and Northern Ireland conditional on applicants completing checks that confirm they are appropriately registered for tax.
- Aggregates levy: Consultation on proposals on the treatment of aggregate removed during construction works.
Other tax policy announcements and reports
Finally, there were some other tax policy announcements and the publication of a range of reports, summaries of responses to earlier consultations and HMRC Research Reports. These included the interim report into the Business rates review, the announcement of the terms of reference for the review of the Office of Tax Simplification, the summary of responses to the review of the taxation of trusts and two HMRC Research Reports into aspects of MTD for VAT.
The Chancellor also wrote to the Office of Tax Simplification about its first report into Inheritance Tax (dealing with administration) accepting two recommendations:
- To change reporting regulations so that from 1 January 2022 over 90% of non-taxpaying estates each year will no longer have to complete IHT forms for deaths when probate or confirmation is required; and
- To make permanent the ability for those dealing with a trust or estate to provide an IHT return without requiring physical signatures from all others involved, easing the administration burden in cases where an IHT return is still required.
ICAS would like your feedback
We welcome input from Members about any tax consultations or calls for evidence. We are also currently looking for input on your experiences of dealing with HMRC, in the light of the standards set out in the new HMRC Charter. ICAS belongs to the Charter Stakeholder group which will be giving input in April on how HMRC is performing against the standards, for inclusion in the Charter Annual Report. Please send us your feedback by emailing tax@icas.com.