Tax Day 2021: Government publishes a raft of updates, consultations, and policies

• On Tuesday 23 March 2021 Government published over 30 consultations, documents and updates in order to “strengthen tax policy making” on a day dubbed “Tax Day”
• The publications cover a wide spectrum of taxation with the HM Treasury paper split into three sections;
  • Modernising tax administration
  • Tackling non-compliance and
  • Further tax policy announcements

We have detailed some of the key announcements below;

Modernising tax administration

• Making tax digital (MTD) – Legislation to enable the extension of MTD to smaller VAT registered businesses from April 2022 was introduced in the Finance Bill 2021. As announced at Budget 2021, Government also intends to legislate later this year to extend MTD to Income Tax Self-Assessment (ITSA) from April 2023. Government published new research which demonstrates a range of benefits to businesses that have already started using the service.

See publications and here and here. 

• As announced at Budget 2021, Government will be investing £95m in HMRC to deliver new digital technology needed to help develop a single digital account and single customer record. The funding will also allow HMRC to develop services that will enhance their ability to collect and receive payments with the aim of helping taxpayers to budget and manage their finances.
• Tax administration framework review – A call for evidence on the tax administration framework has been published which welcomes view of on how the tax administration framework could be reformed to support a trusted, modern tax administration system. The aim is to enable Government to understand how they can create a more straightforward tax system where it is easier and simpler for payments to be made.

The call for evidence will run until 13 July 2021.

• Timely Payment – The government published a call for evidence to understand the opportunities and challenges which come with in-year calculation and payment for ITSA and corporation tax for small companies.

The call for evidence will run until 13 July 2021.

Tackling Non-Compliance

• Raising standards in the tax advice market –  Government published a call for evidence in 2020 on raising the standards in the tax advice market. A further call for evidence has been published which aims to capture views on the definition of “tax advice” and to consider implementing a compulsory requirement for tax advisers to hold professional indemnity insurance. This is being considered with the aim of improving tax advice and ensuring all taxpayers have better access to redress where they have received bad advice.

The consultation closes on 15 June 2021.

• Clamping down on promoters of tax avoidance –

As announced in November 2020, Government has published a consultation to clamp down on promoters of tax avoidance. The consultation includes the following proposals;

• Ensuring HMRC can freeze a promoter’s assets so that the penalties they are liable for are paid
• Tackling both offshore promoters and the UK entities that support them
• Closing down companies that promote avoidance schemes and disqualifying their directors
• Supporting taxpayers to identify and exit avoidance schemes

HMRC has published draft technical guidance on the package of measures intended to amend existing anti-avoidance measures which is currently being legislated for in Finance (No2) Bill 2021. The intent of the proposals is to strengthen the sanctions against those who promote or enable tax avoidance schemes.

• Tackling disguised remuneration tax avoidance – The Government has released a summary of the responses to the call for evidence in 2020 which set out the next steps in tackling disguised remuneration tax avoidance which includes taking action to tackle promoters of schemes and educate taxpayers.
• Other consultations published under the banner of “tackling non-compliance” include;
  • Helping Taxpayers get offshore tax right
  • Preventing and collecting international tax debt
  • Hidden economy conditionality – Northern Ireland and Scotland

Each of these consultations run until 15 June 2021.

• Off-payroll working rules – Two research and analysis documents were published documenting the external research into the impact of the 2017 off payroll working reform in the public sector. This comes ahead of the extension of the reforms into the private and voluntary sectors from 6 April 2021.

Effects of the off payroll working reforms on employment agencies

Effects of the off payroll working reform: education report

We will review these in more detail and draft further news.

Further tax policy announcements

• Government will conduct a review of the effectiveness of the Office of Tax Simplification (OTS) in providing advice and recommendations on simplifying the tax system as required by the Finance Act 2016.
• A summary of responses to the consultation on notification of uncertain tax treatment by large businesses, which was released following the 2020 budget has been published. See our news on the first consultation here. Government has also released a second consultation on this matter with the notification requirement due to come into effect from April 2022.

Aspire comment

For more information about the Budget which is reference throughout please see our news here as well as news on the Finance (No2) Bill 2021.

Should you wish to discuss any of the publications issued today please give us a call on 0121 445 6178 or email enquire@aspirepartnership.co.uk.