Chartered Accountants Ireland is preparing a submission to the Call for evidence: timely payment consultation. We need your feedback to build our response to this which mainly focuses onthe potential to move to more frequent in-year tax calculation and payment. The Institute previously responded to a similar consultation “Voluntary pay as you go” in 2016 in the context of Making Tax Digital.
As part of the Government’s 10-year strategy to build a trusted, modern tax administration system, this call for evidence is being badged as the start of a conversation about the benefits and challenges of the current tax payment timings, and for moving to more frequent, in-year tax calculation and payment. It focuses on Income Tax Self-Assessment (“ITSA”) and Corporation Tax (“CT”) for companies outside the quarterly instalment regime, but welcomes feedback on other taxes.
This will be of interest to everyone paying Income Tax and National Insurance contributions outside existing regular payment regimes (such as Pay as You Earn) and those in Corporation Tax Self-Assessment who are not within the quarterly instalment payment regime.
Tell us about your views by Monday 5 July 2021 on any of the following key questions:-
Do you have any comments on the benefits and challenges of timely payment?
Please provide a narrative, with examples if possible, of any other benefits, challenges or impacts which you consider should be of central concern when looking at this proposal.
What are the advantages/challenges of the current payment timings for ITSA?
Are there any groups who rely more heavily on these than others or are challenged or disadvantaged more than others?
Do you have any comments on the specific challenges faced by non-business ITSA taxpayers (i.e. those in ITSA other than the self-employed, landlords, or large partnerships)?
Do you have any comments on the specific challenges faced by new ITSA taxpayers?
Do you have any initial comments specifically on the impact of basis periods on more timely payment of ITSA?
What are the benefits/challenges of the existing payment timings for CT?Are there any types of company, sectors, or other distinctions which rely more heavily on the long payment window than others or make the current payment timings challenging or disadvantageous?
Do you agree that if there is to be a more frequent tax payment regime, it should generally be based on current year liability?
Do you have any initial comments on the benefits and challenges of different calculation options to meet diverse taxpayer needs versus one process for all taxpayers in scope?
What are your views on using digital solutions to facilitate in-year calculation, and what and how could specific groups be affected negatively by this?
Do you have any initial comments on the feasibility and benefits for MTD taxpayers of paying in-year instalments towards their tax bill, informed by their quarterly MTD updates?
Are there taxpayers for whom MTD updates would be a particularly unreliable guide for in-year tax payments, and what alternative basis might be more reliable for them?
Do you have any initial comments on how income and expenses could be reported in year for non-MTD taxpayers or on a more frequent basis than required by MTD?
Do you have any initial views on the benefits and challenges of monthly, quarterly, or other, payment frequency?
How could more frequent payment based on current year liability be phased in?
Do you have any comments on the positive and negative cash-flow impacts for businesses of more timely payments?
What wider economic impacts do you foresee from reducing the time between the income and the taxation?
Do you have any initial comments on the opportunities and challenges of more timely payment of CGT?
The full list of consultation questions are on page 38 of the Call for evidence.
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