A number of consultations will be published on Tax Administration and Maintenance Day. ICAEW’s Tax Faculty outlines what could be coming.
Tax Administration and Maintenance (TAM) day will form part of the “further steps the government is taking to further progress tax simplification, tackle non-compliance and ensure our tax system is fit for the modern world”, according to the written ministerial statement accompanying its announcement.
The accompanying news story also indicates that consultations for announcements made at the Autumn Budget 2021, and summaries of responses to recently closed consultations and technical information notices, will also be issued on TAM day.
Most will have an inkling of at least some of the consultations might comprise. The Autumn Budget announced a number of consultations that have not yet been published. However, the Tax Faculty understands that there will also be a consultation on registration for self assessment, recognising the fact that processes need significant procedural as well as legislative improvement.
The first Autumn Budget 2021-related consultation is likely to concern an online sales tax. This consultation will explore the arguments for and against the introduction of such a tax. It might be used (perhaps even hypothecated) to reduce business rates. This consultation is likely to focus on the merits of such a tax rather than the design detail, so don’t expect its imminent introduction.
Secondly, research and development (R&D) tax reliefs will be reformed from April 2023 to support modern research methods, expanding qualifying expenditure to include data and cloud costs. The objective is to more effectively capture the benefits of R&D funded by the reliefs by refocusing support towards innovation in the UK. It is also intended to target abuse and improve compliance.
The government will also consult on options to simplify the VAT treatment of fund management fees
The final consultation promised in the Autumn Budget will be on accounting changes for insurance contracts. This consultation will inform the changes that the government will make in response to the new International Financial Reporting Standard (IFRS) 17. It will include enabling insurance companies to spread the transitional impacts of IFRS 17 for tax purposes and revoking the requirement for life insurance companies to spread acquisition expenses over seven years for tax purposes. The enabling legislation is in Finance Bill 2021-22.
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