After the excitement of the Budget and the issue of the Finance Bill, 23rd March was billed as “Tax Day” with the government issuing a raft of consultations and policies.
In the end, the day was – correctly – overshadowed by the anniversary of the first Covid-19 lockdown, but as it happened the announcement turned out to be rather damp.
Some of the highlights include:
- Payment of income tax and corporation tax – in line with the introduction of “MTD,” the government wants to look at more regular payments of income and corporation tax rather than twice (Self Assessment) or once (Corporation Tax for most companies) per year as currently. This will affect cashflow and it is supposed to align the payment of the tax with the receipt of the profit
- The government want to look at measures that raise standards in the tax advice sector, including provision of a definition of “tax advice” and making professional indemnity insurance compulsory for all tax advisers. We are pleased to see this being addressed. Our people are regulated by various professional institutions, all with a view to protecting our clients, and the proliferation of unregulated, uninsured advisers does not help anyone
- Inheritance Tax (“IHT”) even fewer estates will be required to submit IHT forms in order to obtain Probate or Confirmation, in particular those where no IHT is payable. After the reform – due to be introduced on 1 January 2022 – over 90% of estates will not have to submit forms to HMRC. However, it is worth noting that as only about 4% of estates result in a IHT liability there will still be some estates submitting forms even thought he tax charge is nil
- Trusts – after a consultation in 2018 and various rumours since then, it has been confirmed that there will be no change to the current taxation regime
- There is to be a “fundamental” review of Business Rates, including for holiday lets. The review will attempt to ensure that owners of properties cannot reduce their tax liability by declaring that a property is available for let while making little or no actual effort to do so. Details will be announced in the Autumn
- There will be technical changes to the tax rules regarding Pension Schemes. These will cover:
- Age discrimination issues
- The rules when an individual asks their pension scheme to settle annual allowance charges from previous tax years by reducing their future pension benefits (‘Scheme Pays’)
- Superfunds – consolidation vehicles for defined benefit pension schemes, In this case the government’s approach will be informed by the features of the permanent regulatory regime.
Perhaps unsurprisingly in view of Brexit, there are a few measure looking at VAT. There is to be no change to the rules on VAT grouping but there are consultations on Partial Exemption and Capital Goods Schemes, on value shifting, and on VAT on land and property.
This is not a full list of the consultations so if there’s something missing – talk to your usual Robson Laidler contact.