Tax Day – what news did it bring?
Friday, 26 March 2021
So, Tax Day on 23 March came and went without the headline hitting consultations that were widely rumoured. Capital Gains Tax got another reprieve with no significant mentions so we’ll have to wait and see what future Budgets hold. Similarly, there were no major announcements in connection with Inheritance Tax.
Tax Day did bring consultation documents and calls of evidence but many focused around the less common areas of taxation. They were framed around three areas:
Modernising tax administration
This is part of the Government’s 10-year administration strategy to ‘build a trusted, modern tax administration system’. The strategy sets out how HMRC will make sure tax administration keeps up with the rapid changes taking place in society, and the economy and technology, to deliver the flexible, resilient, and responsive tax system the UK will need in the years ahead.
With this focus, these are the key consultations/calls of evidence we saw released on Tax Day.
- Timely payment: This is to review 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 and Corporation Tax for companies outside the quarterly instalment regime.
- Reducing Inheritance Tax reporting requirements: The Government will reduce the administrative burden for those dealing with Inheritance Tax. Reporting regulations will be simplified later this year so that, from 1 January 2022, over 90% on non-taxpaying estates each year will no longer have to complete Inheritance Tax forms for deaths when probate or confirmation is required.
The Government is committed to clamping down on deliberate non-compliance, as well as supporting taxpayers to get their tax right first time, to tackle the tax gap. The consultations are focused around clamping down on promoters of tax avoidance and helping taxpayers get offshore tax right.
Further tax policy announcements
These consultations focus on areas where the Government is considering reform, set out next steps on work under way, and report back on recent work that has explored potential changes. Key areas to note:
- Strengthening the self-catering accommodation criteria for business rates: The Government will legislate to change the criteria determining whether a holiday let is valued for business rates to account for actual days the property was rented. This will make sure that owners of properties can’t reduce their tax liability by declaring that a property is available for let while making little or no actual effort to do so.
- Taxation of trusts: The Government is publishing a summary of responses to a consultation they carried out back in 2018. The responses didn’t indicate a desire for a comprehensive reform of trust tax at this stage, which is welcome news. The Government however will keep the issues raised under review.
So, as you can see, Tax Day wasn’t full of the big announcements we may have been expecting and therefore the crystal ball gazing continues.
If you were putting planning and decision making on hold pending the Budget and Tax Day please don’t hesitate to speak to your usual contact who will be pleased to help. You can find contact details on the Our People section of our website. Alternatively, call 0330 024 0888 or email email@example.com