TAXline News: May 2021

The Finance Bill was published on 11 March 2021. At 363 pages, it is longer than recent Finance Bills and includes 54 pages devoted to the new plastic packaging tax. We will be reviewing it and submitting comments on key areas of concern to MPs on the Finance Bill Committee. If you have any comments on the Finance Bill, please send them to peter.bickley@icaew.com.

The government has instituted a new fiscal event in which reforms of the tax system under consideration are opened up to consultation. The day chosen, originally dubbed ‘Consultation Day’ but more recently merely ‘Tax Day’, was 23 March.

Rumours in advance of the day suggested that we could see up to 30 consultation documents published. However, although there were 30 documents, only 12 of them were new consultations, with the rest being updates on previous consultations and previous announcements. Further details of the most important ones are set out below.

The government has published a call for evidence on the tax administration framework. It includes some far-reaching proposals that, if implemented, would fundamentally change large parts of the existing Taxes Management Act 1970, as amended. The call for evidence runs until 13 July 2021 and the faculty will be holding a webinar on it to gather the views of all ICAEW members. Please send comments to caroline.miskin@icaew.com.

In addition, a call for evidence was published on possible options for the more timely payment of income tax self assessment and corporation tax. HMRC would like taxpayers to pay their tax closer to the time their income is received, but any changes would not happen in the life of this Parliament. The call for evidence runs until 13 July 2021 and the faculty will be holding a webinar to gather the views of members. Please send comments to caroline.miskin@icaew.com.

As part of its work to raise standards in the tax advice market, HMRC is seeking views on its proposal to require tax advisers to hold professional indemnity insurance and on a potential enforcement regime. This consultation runs until 15 June 2021. If you have any comments, please send them to richard.jones@icaew.com.

The Tax Faculty’s MTD for ITSA working group, which includes practitioners and soft ware developers, met to discuss the latest developments. We continued to engage with HMRC on the MTD for income tax proposals and held some informal discussions with HMRC on the MTD programme.

HMRC is still considering the representations made on the MTD ITSA regulations and these will not now be published until later in the year. We expect further engagement with HMRC on the regulations and the pilot.

Engagement with the HMRC Self-employment Income Support Scheme (SEISS) team restarted following the Budget announcement about the fourth and fifth grants. The main issues are the onerous pre-verification checks for some newly self-employed claimants and the new turnover reduction test for the fifth grant.

During the period there were virtual meetings of the Tax Faculty Board, the Tax Policy and Reputation Committee, the Technical and Oversight Committee, Employment Taxes and NIC and the VAT and Duties Committee.

In addition to attending regular stakeholder meetings with HMRC, we attended a special meeting of the Representative Bodies Steering Group (RBSG) on 12 March to discuss the future of the agent dedicated line and how priority access might be restored. A further special meeting of the RBSG was held on 30 March to discuss HMRC’s collection of debt.

On 4 March we held a webinar on managing tax risks. Our thanks go to James Egert, Karen Riley, Steven Levine and Carrie Rutland from BDO for presenting the webinar, which provided an overview of the key risks that companies face in making disclosures, submitting accurate returns and applying the law correctly. The webinar was moderated by Richard Jones and you can watch it by following the links on the webinar pages.