• Current students
      • Student centre
        Enrol on a course/exam
        My enrolments
        Exam results
        Mock exams
        Learning Hub data privacy policy
      • Course information
        Students FAQs
        Student induction
        Course enrolment information
        F2f student events
        Key dates
        Book distribution
        Timetables
        FAE elective information
      • Exams
        Exam Info: CAP1
        E-assessment information
        Exam info: CAP2
        Exam info: FAE
        Access support/reasonable accommodation
        Extenuating circumstances
        Timetables for exams & interim assessments
        Interim assessments past papers & E-Assessment mock solutions
        Committee reports & sample papers
        Information and appeals scheme
        JIEB: NI Insolvency Qualification
      • CA Diary resources
        Mentors: Getting started on the CA Diary
        CA Diary for Flexible Route FAQs
      • Admission to membership
        Joining as a reciprocal member
        Conferring dates
        Admissions FAQs
      • Support & services
        Recruitment to and transferring of training contracts
        CASSI
        Student supports and wellbeing
        Audit qualification
        Diversity and Inclusion Committee
    • Students

      View all the services available for students of the Institute

      Read More
  • Becoming a student
      • About Chartered Accountancy
        The Chartered difference
        What do Chartered Accountants do?
        5 Reasons to become a Chartered Accountant
        Student benefits
        School Bootcamp
        Third Level Hub
        Study in Northern Ireland
        Events
        Blogs
        Member testimonials 2022
        Become a Chartered Accountant podcast series
      • Entry routes
        College
        Working
        Accounting Technicians
        School leavers
        Member of another body
        International student
        Flexible Route
        Training Contract
      • Course description
        CAP1
        CAP2
        FAE
        Our education offering
      • Apply
        How to apply
        Exemptions guide
        Fees & payment options
        External students
      • Training vacancies
        Training vacancies search
        Training firms list
        Large training firms
        Milkround
        Recruitment to and transferring of training contract
        Interview preparation and advice
        The rewards on qualification
        Tailoring your CV for each application
        Securing a trainee Chartered Accountant role
      • Support & services
        Becoming a student FAQs
        Who to contact for employers
        Register for a school visit
    • Becoming a
      student

      Study with us

      Read More
  • Members
      • Members Hub
        My account
        Member subscriptions
        Annual returns
        Application forms
        CPD/events
        Member services A-Z
        District societies
        Professional Standards
        Young Professionals
        Careers development
        Diversity and Inclusion Committee
      • Members in practice
        Going into practice
        Managing your practice FAQs
        Practice compliance FAQs
        Toolkits and resources
        Audit FAQs
        Other client services
        Practice Consulting services
        What's new
      • In business
        Networking and special interest groups
        Articles
      • Overseas members
        Home
        Key supports
        Tax for returning Irish members
        Networks and people
      • Public sector
        Public sector news
        Public sector presentations
      • Member benefits
        Member benefits
      • Support & services
        Letters of good standing form
        Member FAQs
        AML confidential disclosure form
        Institute Technical content
        TaxSource Total
        The Educational Requirements for the Audit Qualification
        Pocket diaries
        Thrive Hub
    • Members

      View member services

      Read More
  • Employers
      • Training organisations
        Authorise to train
        Training in business
        Manage my students
        Incentive Scheme
        Recruitment to and transferring of training contracts
        Securing and retaining the best talent
        Tips on writing a job specification
      • Training
        In-house training
        Training tickets
      • Recruitment services
        Hire a qualified Chartered Accountant
        Hire a trainee student
      • Non executive directors recruitment service
      • Support & services
        Hire members: log a job vacancy
        Firm/employers FAQs
        Training ticket FAQs
        Authorisations
        Hire a room
        Who to contact for employers
    • Employers

      Services to support your business

      Read More
☰
  • Find a firm
  • Jobs
  • Login
☰
  • Home
  • Knowledge centre
  • Professional development
  • About us
  • Shop
  • News
Search
View Cart 0 Item

Brexit

☰
  • Brexit home
  • Resources
  • VAT changes
  • Movement of goods
  • Audit and professional qualifications
  • HMRC & Revenue updates
  • Contact us
  • Home/
  • Knowledge centre/
  • Brexit/
  • Brexit news item

Final work projects of the Office of Tax Simplification

Feb 07, 2023

The Office of Tax Simplification (“OTS”) has now closed and ceased its work after Finance Act 2023 received Royal Assent last month. In the months of November and December it published its review of residential property income in a report and the report on hybrid and distance working.

Report on hybrid and distance working

This report examines the complexities driven by hybrid working, including for periods where employees choose to work overseas.

As part of its work leading up to issuing this report the OTS talked to a wide range of businesses and others to consider the challenges and complexities that have arisen for employers and employees following the changes in working practices in the wake of the pandemic. ONS surveys suggest that about 40 percent of the workforce is able to work from home and the evidence is that many are splitting their working time between home and office-based working.

The report’s key findings are as follows:-

  • Businesses see hybrid working as here to stay and are planning accordingly – although many suggested that the approach to different ways of working will continue to develop;
  • Offering employees the ability to work some of the time at home in the UK is almost universal amongst those the OTS heard from;
  • Employers call for a review of the expense and benefits systems, where many concepts are tied to more traditional ways of working. Adding additional tax reliefs would have a significant exchequer cost – but new ways of working present the opportunity to reconsider the approach to employee tax reliefs;
  • As well as the government considering policy change, respondents asked for HMRC to improve guidance to help both employers and employees; at present there is limited guidance on hybrid working;
  • Working abroad for short periods is not taken up by many employees, but still seen by many employers as a crucial business policy to attract and retain staff. Businesses are also permitting a small number of individuals to live and work overseas on a long term basis whilst the benefit of their services is mainly received in a different country;
  • The social security and payroll implications of cross-border working are already complex, and these and the UK’s position on issues such as taxable presence for the business (permanent establishment) were seen by businesses as unclear where the staff are the ones choosing to work overseas for short periods;
  • On both cross-border payroll and social security issues, businesses want to see improved HMRC processes, turnaround times, more PAYE relaxations and better guidance; and
  • Multinational businesses want to see the UK taking a lead on how permanent establishment and transfer pricing interact with staff who choose to work overseas on for personal reasons and longer term, and where possible, businesses would like the UK to set out unilateral guidelines that can be clearly understood.

Residential property income report

This report examines the income tax rules for residential property income, exploring the common complexities, issues, and concerns facing taxpayers.

Key findings from the report are as follows:-

  • Although the furnished holiday lettings regime can provide some tax benefits, it is not widely used and adds a complex layer to the tax rules which apply to property income. The government should consider whether there is continuing benefit to the UK in having a separate tax regime for furnished holiday lettings;
  • The report recognises that removing the furnished holiday lettings regime could put pressure on the boundary between whether a taxpayer has a property business or a trade, and recommends the government consider whether it would be appropriate to introduce a statutory ‘bright line’ test to define when a property business should be handled under the trading rules;
  • Should the government wish to retain the furnished holiday lettings regime, the report recommends that the government consider removing the benefits for properties in the EEA and removing the benefits where there is private use (other than a minimal level);
  • The report reflects the weight of feedback on the long-standing tax complexity for landlords of whether costs are allowable straight away as repairs and replacements or should be disallowed for income tax as capital improvements, and recommends the government consider a broader immediate income tax relief for the majority of property costs;
  • Nearly half of landlords will be filing for Making Tax Digital for Income Tax in respect of jointly-owned property. It is common practice for only one of the owners to keep records, and the report recommends that HMRC should establish a system to allow this practice to continue for Making Tax Digital. The report also notes the importance of HMRC accepting multiple agents to help with the new tax filings and recommends that HMRC should not go ahead with Making Tax Digital until these issues have been resolved.

The report also covers the general regime for property and the confusion and challenge raised by large numbers of respondents about matters such as the allocation of income between joint owners, and in relation to rules which cause significant distortions or complexity such as the circumstances for diversified agricultural businesses.

It also looks in detail at how Making Tax Digital (“MTD”) for income tax will affect landlords, and questions whether the initial and medium term threshold for entry into the new system should be increased above £10,000. Readers should note that the report was published before the Government’s December announcement on MTD.

Non-resident landlords are examined and the report encourages HMRC to make it easier for them to register for and report their income online for UK tax purposes. It also recommends that the government should consider removing the obligation on individual residential tenants in some situations to withhold tax from their rental payments to non-resident landlords.

The latest news to your inbox

Useful links

  • Current students
  • Becoming a student
  • Knowledge centre
  • Shop
  • District societies

Get in touch

Dublin HQ

Chartered Accountants
House, 47-49 Pearse St,
Dublin 2, D02 YN40, Ireland

TEL: +353 1 637 7200
Belfast HQ

The Linenhall
32-38 Linenhall Street, Belfast,
Antrim, BT2 8BG, United Kingdom

TEL: +44 28 9043 5840

Connect with us

Something wrong?

Is the website not looking right/working right for you?
Browser support
CAW Footer Logo-min
GAA Footer Logo-min
CCAB-I Footer Logo-min
ABN_Logo-min

© Copyright Chartered Accountants Ireland 2020. All Rights Reserved.

☰
  • Terms & conditions
  • Privacy statement
  • Event privacy notice
  • Sitemap
LOADING...

Please wait while the page loads.