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Tax Day: Blizzard of consultations

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Tax Administration and Maintenance Day (TAM) has delivered 28 tax consultation documents and responses to con docs, plus two sets of draft regulations. Rebecca Cave has summarised what you need to know.  

30th Nov 2021
Tax Writer Taxwriter Ltd
Columnist
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Formally known as Tax day, TAM day is an opportunity for government to set out its stall as to how it would like to develop tax policy in various areas, and to respond to existing tax consultations.

This year there is an overarching policy paper which summarises the approach over the range of constatations issued at this time.

Small businesses and landlords

Possibly the most interesting consultation in this bunch is the call for evidence on reforming the procedures for ITSA registration for landlords and the self-employed

The government wants to know how the current processes can be improved to make a better experience for individuals when they register for tax purposes, and how more people can be encouraged to comply with their tax obligations.

HMRC has recently been looking closely at tax avoidance schemes operated by a number of umbrella companies, so it has issued a call for evidence on the role that umbrella companies play in the labour market.

There is also a call for evidence on tax debt collection from non-paying businesses. In other words: how to get businesses to pay their tax when they are determined not to.

I think these three issues may just be connected. 

SDLT: Mixed use and MDR 

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Replies (11)

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By Hugo Fair
30th Nov 2021 19:15

A very useful (if somewhat depressing) summary of govt (or really Treasury) intentions.

But will they never take therapy for their addiction to weasel words ... "In response, the government has promised it will continue to ensure that MTD for CT delivers a range of benefits to businesses in the longer term"?
Continue? How can you continue to ensure something that has so far eluded any sense of existence?

Thanks (8)
Replying to Hugo Fair:
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By Paul Crowley
30th Nov 2021 20:48

+1

MTD CT will never deliver a range of benefits

Interesting that HMRC gave up on companies paying anything other than up to 1 year and nearly 9 months after receiving income but want the landlord and self-employed on Ersatz PAYE.

And all the volunteers for the pilot will think it is great paying unknown vague payments on account

Thanks (5)
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By johnjenkins
01st Dec 2021 09:47

No change here then. SME's still to be hit because they're easy targets. If Boris wants to boost the economy then he has to get rid of IR35, allow market forces to decide employment status (tax accordingly) and get rid of mandatory MTD. If these things aren't done I see the small business, economy and HMRC being destroyed. I now see mandatory MTD as a virus which doesn't need a vaccine, just a bit of common sense to ease us into someone's idealistic bull.

Thanks (8)
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By North East Accountant
01st Dec 2021 10:15

So for years HMRC has been saying about MTD..."no we are not going to have quarterly payments of tax" and accountants have been saying that's what HMRC will want.

Here is the consultation, next step quarterly payment.....as accountants have said along.

And how can people be encouraged to comply with their tax obligations.......have an actual deterrent.

Raising standards in the tax advice industry........regulation of tax advisors will be next.

Thanks (3)
Tornado
By Tornado
01st Dec 2021 10:35

"This consultation looked at the possibility of moving to quarterly tax payments for income tax self assessment (ITSA)"

Good luck to them if they intend to use (rubbish) quarterly MTD submissions, but if they stuck to the current Self Assessment system, then payments on account could be collected four or more times a year with practically no additional effort involved.

Thanks (14)
Replying to Tornado:
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By Paul Crowley
01st Dec 2021 10:55

HMRC finally admit the whole point of MTD
How can taxpayers have trust in the integrity of such an organisation.
And what hypocrisy from an organisation looking to attempt regulation of "tax advisors"
"tax advisors" include the flat out wrong information contained on the Gov website and their best buddies the software pushers websites.
Those two make the rest of us look gleaming

Thanks (5)
Replying to Paul Crowley:
Tornado
By Tornado
01st Dec 2021 11:26

I am now starting to find the whole concept of MTD as quite hilarious.

At the moment it requires a University Degree to work out what some clients owe in tax as HMRC do not use bank style tax statements, so a liability calculated on a particular day will never be fixed as the next day some other adjustment has been made to the account and a brand new balance arises. The problem with this is that it can take a very, very, long time to work out exactly what the change has been from the previous day.

If HMRC are going to continue with this system for MTD for ITSA, then it will be almost impossible for ordinary people (and Accountants) to work out easily and quickly exactly what is owed and what is a genuine debt and what is the latest estimated debt.

There will be millions upon millions of daily adjustments to some 5 million tax accounts and the likelihood of a complete meltdown of the whole tax system as the HMRC computers struggle with the load and probably thousands of bugs in the software.

And all of this in the name of letting taxpayers know more easily what their tax liability will be.

Absolutely hilarious.

I would not take part in any consultation on this as the likely outcome could already be predicted by a 10 year old.

Thanks (7)
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By justsotax
01st Dec 2021 10:34

MTD qtrly payments......will come as no surprise to the majority of advisers.... I wonder what mock surprise the software pushers (sorry I meant providers) will show in light of this 'new' information.

Thanks (3)
Nigel Harris
By Nigel Harris
01st Dec 2021 12:45

I think we all thought quarterly Income Tax payments were inevitable.

I'm surprised at the delay in MTD for CT, it's the simplest of return systems and since it's already fully online moving to "MTD" (whatever that means) shouldn't be a big deal - a bit like the transition between the old and MTD VAT systems. There's already a system in place for quarterly CT payments for large companies to use as a template. Whatever the reason for postponing it, it's nothing to do with tax IMHO.

Thanks (1)
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By bluebaron
01st Dec 2021 12:48

So the cat has been let out of the bag -despite repeated denials by HMRC, it's all about quarterly tax payments (based on rubbish data of course)!! Unbelievable.

Thanks (3)
RLI
By lionofludesch
03rd Dec 2021 11:45

It made me smile to see that, having contributed to umbrella companies with their IR35 campaign, HMRC are now whinging about them.

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