Government sets out steps to modernise and simplify UK tax system

The update on reforms to Small Brewers Relief will see the government invest around £15 million of additional funding into the craft brewing sector. This will enable small breweries to expand without losing tax relief and addresses concerns raised by stakeholders that the current scheme fails to incentivise growth.

Also published was a technical consultation setting out further detail on the conclusions to the government’s review of business rates, including more frequent revaluations, improvement relief, exemptions for green technology, and administrative reforms.

The papers were released as part of Tax Administration and Maintenance Day to support greater transparency, discipline and accessibility of tax policymaking.

The government has set out further detail on its work to deliver a modern, simple and effective tax system – which helps taxpayers get their tax right the first time including work to support the delivery of announcements from the autumn budget and to help stimulate economic growth as it recovers from the pandemic.

The announcements follow the commitment the Chancellor made at Autumn Budget and Spending Review 2021 for there to be a dedicated day this autumn for the administration and maintenance of the UK’s tax system to support greater transparency, discipline and accessibility of tax policymaking.

“We want to build a tax system which supports the economic recovery, is simpler for businesses, and helps taxpayers get their tax right the first time,” financial secretary to the Treasury, Lucy Frazer said.

Jim Harra, HMRC’s first permanent secretary and chief executive said as part of the improvements the government is committed to double down on avoidance and evasion.

“We know that an open dialogue with our stakeholders is vital,” Mr Harra said.

“With thanks to the tax profession for their views, we can now announce the next steps for how we will simplify the legislative framework and raise standards in the tax advice market. We are also announcing new areas on which we are inviting views, including reforming Income Tax Self-Assessment registration for the self-employed.”

A report on research and development (R&D) tax reliefs, providing further details on announcements made at the budget was also released that included details on refocusing relief in the UK, targeting abuse, and supporting innovation by expanding qualifying expenditure to capture cloud and data costs. It also provides a summary of responses to the consultation.

Tax Administration and Maintenance Day builds on the action the government took as part of its March 2021 tax policies and consultation update, where the government set out measures to support the government’s wider 10-year plan to build a modern and trusted tax administration system, and to tackle non-compliance.

The 10-year plan was published in July 2020, to modernise the tax administration framework, make better use of real-time and third-party information, and progress Making Tax Digital to improve the experience for taxpayers and businesses, reducing the tax gap and increasing resilience.