“Tax day” sees publication of further important consultations - 6 April 2021

Apr 06, 2021

HM Treasury held its new “Tax Day” on Tuesday 23 March and published a range of consultations, consultation responses, calls for evidence and reviews many of which are focused on modernisation of the UK tax system. Full details of these, and other announcements are available on GOV.UK. A flavour of some of the key publications is outlined below.

 

Raising standards in the tax advice market: professional indemnity insurance and defining tax advice

Last November, the Government’s response to the tax advisers consultation which the Institute responded to in summer 2020 was published. The direction of the consultation response agreed with the Committee’s recommendation of compulsory professional indemnity insurance.

The planned consultation on the requirement for all tax advisers to possess appropriate levels of professional indemnity insurance has now been published. This consultation also seeks feedback on the definition of tax advice. Chartered Accountants Ireland will continue to engage with HMRC as this project continues. This second consultation closes on 15 June 2021.

 

Call for Evidence on the Tax Administration Framework Review

 

This consultation closes on 13 July.  The tax administration framework sets out how HMRC interacts with taxpayers and establishes basic principles for the collection of the UK’s taxes. The framework refers to the legislation, guidance and processes that underpin tax administration.

HMRC see the Framework Review as an opportunity to create a trusted, modern framework that is simpler, easier to navigate and responsive to taxpayers’ needs, and fits into the way people work, live their lives, and operate their businesses. It also aims to provide greater clarity and simplicity around areas of the law where practice has evolved over time.  

According to HMRC, this review is not just a case of exploring small tweaks to legislation. The framework - and the principles underpinning it – will need a fundamental refresh to better serve taxpayers. The Call for Evidence is therefore seeking input from interested stakeholder groups and collating evidence on where the framework could better serve taxpayers.

The Government will then consider how to progress reforms to the tax administration framework, based on its initial findings from this engagement.

 

Call for evidence: Timely Payment

The Government also published a call for evidence on Timely Payment to open the dialogue on the opportunities and challenges of more frequent payment of income tax under Self-Assessment, and corporation tax for smaller companies.

The Government is keen to stress that this is not a commitment to change the payment timings and were changes to be made, they would be beyond this Parliament, consulted on in detail and announced at a future fiscal event. This call for evidence also close on 13 July 2021.

 

Other announcements

Also announced, following recommendations by the Office of Tax Simplification, were changes to inheritance tax reporting requirements. From 1 January 2022, over 90 percent of non-taxpaying estates will no longer have to complete inheritance tax forms for deaths when probate or confirmation is required.

Other changes included making permanent the current temporary provision for those dealing with a trust or estate to provide an inheritance tax return without requiring physical signatures, and clarification of the requirement for estates to submit an inheritance tax account where the deceased was never domiciled in the UK but owned indirect interests in UK residential property. 

The Government also published a consultation on a package of measures to tackle promoters of tax avoidance, a summary of responses on the 2020 call for evidence on Disguised Remuneration and a discussion document, as part of HMRC’s No Safe Havens strategy, seeking views on ways to help taxpayers get offshore tax right first time. 

A further consultation has been published on the notification of uncertain tax treatment by large businesses, which addresses feedback received during the earlier consultation to minimise the uncertainty and the administrative burden on taxpayers whilst still achieving the policy objective.