Tax policies and consultations Spring 2021

The UK Government published a number of tax-related consultations and calls for evidence on 23 March 2021 on a range of tax administration and tax policy areas.

These measures are designed to help shape the next steps in delivering the Government’s 10-year tax administration strategy and will take forward policy development across a range of important tax issues, including business rates and environmental taxes, as well as a range of simplification measures.

Key announcements and publications are as follows:

• A call for evidence on our Tax Administration Framework – exploring how to make tax more straightforward and harder to get wrong, how to improve people’s experience of the tax system, and how to build and maintain trust between HMRC and taxpayers.
• A call for evidence on Timely Payment – exploring the longer-term opportunities and challenges of more frequent payment of income tax within Income Tax Self-Assessment (ITSA), and of corporation tax for small companies, based on in-year information.
• Making Tax Digital (MTD) is the first phase of a modern, digital tax service. Legislation to enable the extension of MTD to smaller VAT registered businesses from April 2022 was introduced in Finance Bill 2021. As previously announced, the government intends to legislate later this year to extend MTD to Income Tax Self-Assessment from April 2023. Alongside this command paper, the government is also publishing new research which demonstrates a range of benefits to businesses that have already started using MTD.
• HMRC: investment in digital infrastructure: At Budget 2021, the government announced investment of £95m in HMRC to deliver new digital technology needed to help build a trusted, modern tax administration system. HMRC will increasingly deliver services centred around each individual or business, rather than a series of interactions with separate taxes and will engage with taxpayers and stakeholders on the design of these services.
• A full consultation on Raising Standards in the Tax Advice Market – seeking views on the definition of tax advice and making indemnity insurance compulsory for all tax advisors.
• Package of measures to tackle Promoters of Tax Avoidance is a summary of responses on the 2020 call for evidence on Disguised Remuneration and a discussion document, as part of HMRC’s No Safe Havens strategy, seeking views on ways to help taxpayers get their offshore tax right first time.
• A further consultation has been published on the notification of uncertain tax treatment by large businesses, which addresses feedback received during the earlier consultation to minimise the uncertainty and the administrative burden on taxpayers whilst still achieving the policy objective.

Full details of these, and other announcements designed to enhance the stability and effectiveness of the UK tax system, can be found on GOV.UK.