It was another busy week last week for tax practitioners as the Government’s Tax Administration and Maintenance (“TAM”) Day took place on Tuesday 30 November. As part of TAM Day, the Government published a Tax Administration and Maintenance command paper and confirmed that a roadmap for future consultation on its Tax Administration Framework review will be published in 2022. We’ve highlighted the key announcements below together with links to key documents published.
Raising Standards in the Tax Advice Market
The summary of responses to the consultation on raising standards in the tax advice market has been published, along with an update on this work and the next steps.
This consultation sought views on whether to introduce mandatory professional indemnity insurance (“PII”) for tax advisers, and the definition of tax advice. After carefully considering the consultation responses, the Government has decided not to introduce the PII requirement at this time, following feedback that on its own, it would not be an effective mechanism to raise standards across the market or have a meaningful impact on consumer protection. Instead, there will be a consultation in 2022 on options to improve the wider regulatory framework around standards in tax advice.
This is in line with the recommendations in Chartered Accountants Ireland’s response to this consultation which was conditionally supportive of mandatory PII subject to the need for additional measures in the area of raising standards including to enhance consumer protection.
Timely payment
A response to this Call for Evidence which examined mandating real time payments of income tax and corporation tax was also published. In line with the Institute’s recommendation not to mandate timely payment, the consultation response confirms that no changes will be made to the timing of tax payments in this Parliament.
It also sets out the next steps, namely:
- Exploring the best approach to achieving more accurate in-year tax calculations via a voluntary in-year calculation proof-of-concept pilot;
- Forming a working group with external stakeholders to explore how best to support taxpayers and help understand the implications and impacts of timely payment for different types of business and sectors, in particular low income or vulnerable taxpayers; and
- Continuing to make improvements to HMRC’s Budget Payment Plan, a voluntary tool for ITSA taxpayers who are up to date with their self-assessment payments and wish to make regular weekly or monthly payments towards their next tax bill (another of the Institute’s recommendations).
Making Tax Digital for corporation tax
The Government’s response to this consultation confirms that MTD for CT will not be introduced any earlier than April 2026. No income based exemptions will be introduced. The key message is that the government will continue to work with stakeholders on the design of MTD for CT.
Review of the Office of Tax Simplification (“OTS”)
As required by Finance Act 2016, HM Treasury conducted a review of the effectiveness of the OTS in its role as independent adviser to the Chancellor on simplifying the tax system. The first five-year OTS review has been now published.
The review concluded that the need for the OTS’s statutory function to advise the Chancellor on simplification of the tax system remains undiminished and also sets out a number of recommendations to maximise the impact of the OTS as it continues to mature as an organisation over the next five-year period and beyond, including that the OTS:
- Expose their reasoning behind their recommendations, particularly where there are trade-offs between simplification and other policy objectives that government must consider;
- More clearly prioritise those recommendations which the OTS considers of most value to taxpayers;
- Maintain and expand the breadth and balance of knowledge, experience and expertise within the Secretariat, while also seeking professional expertise in how it consults externally;
- Consider the volume and type of output it produces, and focuses more on activities that build its preliminary evidence base and embed its work; and,
- Clarifies its aims and objectives in light of its articulation of how it interprets ‘tax simplification’, using this to inform which areas it will prioritise over the next five year period to maximise its impact.
Reforming Research and Development (“R&D”) tax reliefs
At Autumn Budget 2021, the Government announced that R&D tax reliefs would be reformed to
- support modern research methods by expanding qualifying expenditure to include data and cloud costs (as recommended by this Institute);
- to capture more effectively the benefits of R&D funded by the reliefs, through refocusing support towards innovation in the UK; and
- to target abuse and improve compliance.
The government has now published a report providing further detail and the next steps for the review, alongside a summary of responses to the consultation from earlier this year.
New evaluation framework
Although not announced on TAM Day, HMRC recently published a new evaluation framework which sets out the Department’s approach for achieving HMRC’s evaluation vision of good quality monitoring and evaluations of policies, programmes and projects in line with government good practice.
The framework is intended to “deliver proportionate and systematic evaluations, transparency in our evaluation decision-making and build a stronger evidence base.”
TAM Day publications
Key consultation responses, new consultation and publications related to TAM Day are as follows:-
LOADING...