TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

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Annual investment allowance limit to remain at £1 million and MTD for corporation tax consultation launched

On 12 November 2020 the Financial Secretary to the Treasury, released a written ministerial statement providing an update on a number of tax policy measures including further draft legislation for Finance Bill 2021. As part of this, it was announced that the £1 million annual investment limit for capital allowances will not end on 31 December 2020 and is being extended for one further year to 31 December 2021. A new consultation has also been launched on Making Tax Digital (“MTD”) for corporation tax (“CT”).

In July, the Government published ‘Building a trusted, modern tax administration system’, which set out a vision for the future of tax administration in the United Kingdom, designed to improve its resilience, effectiveness and support for taxpayers. This consultation will remain open for 16 weeks and closes on 5 March 2021. The mandation of MTD for CT will then follow, but not before 2026.

HMRC are keen to ensure that stakeholder views shape the design of MTD for CT from the start and would like to encourage a broad range of stakeholders to contribute their thoughts on the CT proposals. Views and engagement is therefore sought through a number of methods, including via email and post (contact details for this can be found in the consultation document).

HMRC will also be conducting a series of virtual events to understand the views of those who may be affected by MTD for CT or who have a direct interest in the consultation. Further details on these events will be made available shortly.

The consultation sets out HMRC’s proposed design of MTD for those entities within the charge to CT. HMRC will also be publishing a shorter and summarised version in the coming months to ensure that all businesses and stakeholders have the opportunity to contribute.

Following the consultation, HMRC has set out its aim is to work collaboratively with stakeholders to integrate the lessons learned from MTD for VAT and income tax into the design of MTD for CT, and to refine the MTD for CT scope and requirements.

HMRC will also be providing entities with the opportunity to take part in a pilot of MTD for CT in advance of mandation which will provide opportunities to experience and review the proposed design of the system, and for HMRC to make improvements to that system based on feedback.