Spring Budget 2023: Tax Disputes & Resolutions

Sentences doubled for tax fraud

The Government has announced that the maximum custodial sentence, in relation to the worst cases of tax fraud, has doubled from seven years to 14 years. This indicates HMRC’s intention to increase criminal prosecutions for tax fraud, but that the current maximum prison sentence was not seen as proportionate in relation to some of the tax frauds being investigated.

Consultation on a criminal offence for promoters failing to comply with stop notices

Also announced was an upcoming consultation, in relation to the introduction of a new criminal offence, for promoters of tax avoidance who fail to comply with a stop notice – a legal notice from HMRC to stop promoting a tax avoidance scheme. This indicates that HMRC has seen evidence that stop notices are not being complied with and further highlights HMRC’s intention to criminally pursue those contributing to or facilitating the tax gap in the worst ways. The opening date for the consultation has not yet been announced.

Levelling up HMRC’s capability to collect tax debts

An investment of £47.2 million was announced to build on HMRC’s capability to collect tax debts, which includes support for those who are temporarily unable to pay. We have recently experienced HMRC’s focus turning to bringing in tax liabilities which are due, following the support offered during the pandemic. This is further signalled by the announcement of this new investment. It is unclear what the support for those temporarily unable to pay will be, but with HMRC’s late payment interest rate currently at 6.5%, this has never been more important.

For more on the above measures, or for any tax disputes queries, contact Danielle Ford, Head of Tax Disputes & Resolutions, or Riocard Hoye, Senior Manager.



Spring Budget 2023: VAT measures

Following the 2023 Spring Budget, we have noted some of the VAT measures which will be affected.

Drinks Deposit Return Scheme

When sales are made, which are within the scope of a relevant deposit scheme, no VAT will be charged in relation to the deposit amount.

VAT will be due on any unreturned deposits by the initial seller of a deposit scheme product. The detailed rules will be set in secondary legislation in due course.

Under the Deposit Return Scheme, deposits are charged at each stage of the supply chain, such as the manufacturer or importer, and then on subsequent sales by wholesalers and retailers. The deposit is refunded when the drinks container is returned, so this new measure is designed to simplify the VAT accounting for deposits.

Services supervised by pharmacists

With effect from 1 May 2023, the VAT exemption for healthcare services will be extended to include services carried out by staff directly supervised by registered pharmacists in the UK.

Medicines dispensed on prescription

The zero-rate of VAT on medicines dispensed on prescription will be extended to medicine supplied through Patient Group Directions (PGDs). This measure will be introduced at some point in Autumn 2023.

DIY Housebuilders scheme

People building their own homes, or converting non-residential buildings into buildings to be used as their private residence, have been entitled to reclaim the VAT they incur on the conversion work. This scheme is to be digitised, but perhaps more importantly, the time limit in which a claim can be made on completion of the work is being extended from three months to six months. This time limit has been rigidly enforced in the past, so this extension is welcome.

If you have any queries on the above, or on VAT issues in general, please contact Phil Salmon, Partner and Head of VAT.



Spring Budget 2023: Full summary

On 15 March 2023, the Chancellor, Jeremy Hunt, delivered a ‘Budget for Growth’ after the Office for Budget Responsibility forecast a stronger than expected performance from the UK economy this year, with inflation continuing to fall.

Our summary provides an overview of the key announcements arising from the Chancellor’s Budget, and how they are likely to impact your business and personal finances.

Please get in touch with your usual haysmacintyre contact, or any member of the Tax team, if you have any queries.

Download the full summary below.

Spring Budget 2023: No further tweaks to stealth taxes

Whilst the Chancellor has set out the four pillars of his industrial strategy of enterprise, employment, education, and everywhere, Katharine notes that for the most part, the Chancellor is sticking to his Autumn Statement, where threshold freezes of Inheritance Tax (IHT), Capital Gains Tax (CGT) and Income Tax created stealth tax increases.

Katharine comments: “Successive U-turns over the past year alone have caused significant upheaval and added unnecessary complexity to the tax system, so I am glad to see this Budget does not make further tweaks to stealth taxes. Now, the dust should finally be able to settle, and individuals can start to plan their taxes more effectively.”

You can read Katharine’s comments in Accountancy Age and ePrivateclient (subscription needed).

You can also read our highlights of the Spring Budget here.




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