Tax Day: HMRC Publishes Tax Policies and Consultations

24th March 2021

On the anniversary of the first COVID-19 lockdown, the Government published a number of policy papers, consultation documents, and calls for evidence, on what has been referred to as ‘Tax Day’. The consultations are intended to influence HMRC’s tax strategy and administration for the next ten years.

The documents/announcements include:

  • Confirmation that Making Tax Digital for Income Tax will go ahead from April 2023, requiring quarterly updates from those with income not taxed at source, such as self employment or rental income
  • Alongside this, a call for evidence has been published on ‘timely payment’ of tax, focusing on Income Tax where not collected at source, eg PAYE, Corporation Tax for companies not in the QIPS regime, and for Capital Gains Tax on gains other than on UK property. With the aid of future digitalisation of tax, this may lead to monthly or quarterly ‘in year’ tax payments for all.
  • A plan to reduce the administrative burden for those dealing with Inheritance Tax (IHT): from 1 January 2022 over 90% of non-taxpaying estates will no longer have to complete IHT forms for deaths when probate or confirmation is required. Also welcome is the making permanent of the current temporary provision for those dealing with a trust or estate to provide an IHT return without requiring physical signatures.
  • Residential property developer tax: the Government will publish a consultation in the coming months on a new tax on the largest residential property developers. The tax will be introduced in 2022 to help pay for the costs of cladding remediation.
  • Fundamental review of business rates: the Government is publishing an interim report, including a summary of responses received to the call for evidence for the fundamental review. The document covers the contributions received across the scope of the review, including the overall level of the tax, revaluations, administration and billing, and alternatives to business rates. The fundamental review will conclude in the autumn.
  • Transfer Pricing Documentation: the Government has published a new consultation on the current transfer pricing documentation requirements
  • Social Investment Tax Relief (SITR): responses to an earlier call for evidence have been published, and as announced at this month’s Budget, SITR has been extended in its current form until April 2023
  • Preventing and collecting international tax debt: the Government has published a discussion paper seeking views on the best way to prevent international tax debt, as well as how best to collect the debt which does occur

A full list of the documents published is available here.

Katharine Arthur

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