HMRC releases 11 ‘tax administration and maintenance day’ consultations

HMRC and HM Treasury have jointly published 11 new consultations, which financial secretary to the Treasury Victoria Atkins deemed “tax administration and maintenance day”. The government has also published outcomes of previous consultations and policy papers, including a summary of its technical tax policy proposals.

“As announced at the Spring Budget, the government is setting out further technical tax policy proposals that support its ambition to simplify and modernise the tax system, tackle non-compliance, make the tax system fairer for taxpayers, and to make the customs system work better for traders,” Atkins said in a written ministerial statement.

While many proposals were welcomed by the profession – RSM employment tax partner Susan Ball hailed the “welcome [and] long overdue” reforms proposed in the consultation of the off-payroll working IR35 rules, for example – there was also caution.

Sarah Coles, Hargreaves Lansdown head of personal finance, noted the government consultation on the Help to Save scheme, but commented: “If the changes work and more people open an account, it’s going to make the scheme much more expensive for the Treasury – unless it’s prepared to plough more money in, it could end up cutting the bonus.”

Others expressed concern about the length of time on many consultations, and questioned how serious HMRC were about receiving quality responses.

Tackling the tax gap

The new consultations are:

• Charities tax compliance – closes 20 July
• Construction Industry Scheme reform – closes 20 July
• Tougher consequences for promoters of tax avoidance – closes 22 June

HMRC also published the outcome of the call for evidence on modernising tax debt collection from non-paying businesses.

Simplification and modernisation of the tax system

The new consultations are:

• The Tax Administration Framework Review: Creating innovative change through new legislative pilots – closes 20 July
• The Tax Administration Framework Review: information and data – closes 20 July
• The taxation of decentralised finance involving the lending and staking of cryptoassets – closes 22 June
• Customs treatment of post and parcel exports – closes 20 July
• Stamp Taxes on Shares modernisation – closes 22 June
• Help to Save Reform – closes 22 June
• Reserved Investor Fund consultation – closes 9 June

HMRC also published the outcome of the consultation on improving the data HMRC collects from its customers.

In announcing the government’s proposed Help to Save simplifications, Atkins said the move was designed to “support savers” and counter the impact of rising prices upon household budgets under strain. The government had already announced at the Spring Budget 2023 that it was extending scheme by 18 months until April 2025.

Meanwhile, BDO’s head of tax dispute resolution Dawn Register noted government proposals to grant HMRC new powers to recover unpaid tax directly from digital wallets and cryptoassets, observing that “new tax debt is running 50% higher than pre-pandemic levels and needs to be reduced”.

“However, the practical challenges of using any new powers will be the real test for HMRC, including digital businesses located offshore.”

Further tax policy and administrative announcements

As mentioned earlier, the government published a consultation on off-payroll working: calculation of PAYE liability in cases of non-compliance, which closes on 22 June.

The government also published a corporate report evaluating how HMRC powers, taxpayer obligations and safeguards introduced since 2012 have been implemented by HMRC; as well as a list of planned evaluation publications from HMRC.

Forthcoming research and analysis will include evaluations of Making Tax Digital, HMRC’s coronavirus support schemes, the capital allowances super-deduction, various tax reliefs, freeports, and off-payroll working reforms.

The government also said that in May it will publish consultations on simplifying and updating legislation on: the diverted profits tax (i.e. increased rate on diverted UK profits), transfer pricing (i.e. related party transactions), and permanent establishments (i.e. right to tax non-resident entities with a UK business presence).

Later in the year, the government will publish consultations on employee ownership trusts, the plastic packaging tax, the VAT Terminal Markets Order, and a further consultation on policy options to regulate umbrella companies and tackle non-compliance in the umbrella company market.

Download IFA Tax Facts 2023.