The Office for Tax Simplification (OTS) has launched a new consultation ‘Claims and Elections Review - call for evidence’ to look at ways to simplify claims and elections across different taxes in relation to individuals, businesses and partnerships.
The review aims to:
- Establish the numbers and types of claims and elections across the main taxes.
- Focus on how to simplify the administration of the more frequently used claims and elections.
- Identify specific claims and elections where there are unnecessary or disproportionate burdens in making them or in securing reliefs or other benefits.
As well as seeking responses to the following questions, the OTS is interested in receiving any claims and elections lists that stakeholders consider when dealing with particular areas of tax.
- What are the types of claim or election that you deal with most frequently?Which claims and elections do you find the most time consuming to deal with?
- Please provide examples of any type of claim or election that you consider are particularly difficult or complex to administer. Please explain why you think this is.
- Please provide examples of any type of claim or election that you consider are particularly easy or simple to administer. Please explain why you think this is.
- Have you been discouraged from claiming a relief because the process involved was, or appeared to be, too difficult or time-consuming? Please provide details.
- Are there any claims or elections for which you feel the information or the work required in making them is excessive or disproportionate?
- In your experience, what are the claims for relief that are most often administered by high volume repayment agents? What do you think motivates people to use such agents rather than dealing with the claim themselves? Do particular benefits or problems arise?
- Do you think there are any reliefs that currently need to be claimed or elections that can be made, where it would be feasible and simpler for them to operate automatically or by default (subject to the ability to opt-out)? Please provide examples.
- Are there any key differences to the way claims or elections are administered across different taxes that you think could helpfully be aligned? Agents who specialise in making claims for specific usually low-value reliefs on behalf of a large number of individuals
- Do any issues or difficulties arise in cases where a claim or election can either be made or amended within a tax return or, either sometimes or only, separately from a return?
- Do any issues or difficulties arise in relation to the time limits within which a claim or election must be made or amended?
- Are there any features that contribute to making time limits in which you must make a claim or election easier to miss? For example, is this the case in relation to time limits that operate by reference to an event rather than the end of a tax year or accounting period?
- To what extent do you think that HMRC’s personal tax account or business tax account could or should be used to make claims or elections that are not made in returns?
- Are there any issues that arise in relation to claims or elections made outside of a person’s employment or self-employment (such as gift aid claims)?
- Are there situations where there is a choice between claims that can be made or where multiple claims interact, that are particularly complex or that distort behaviour?
The OTS has identified a number of specific claims and elections where it appears there can be difficulties for those administering them or where there are potential opportunities for simplification.
Claims for relief for employee expenses
- To what extent do you think those that are entitled to such relief are aware of this? Does this vary by employment sector?
- Have you ever encountered any difficulties in making a claim for relief for employee expenses? Please provide details.
- Do you think that the processes for making such a claim are clear and proportionate?
- Please provide any suggestions you may have for improving the processes for making a claim for employee expenses of any particular type.
- Do you think that it would be beneficial for some reliefs (such as flat-rate expenses) to be given automatically, for example through an employer? Please provide any suggestions you may have for how this could work effectively in practice.
- Are there any issues that arise in relation to the activities of high volume repayment agents in this area?
Capital allowance claims
- Are there any aspects of the process of making a claim for capital allowances (other than identifying which expenditure is eligible for the allowances) that you think are complex or confusing?
- Are there any administrative aspects of capital allowance claims that you find overly time consuming, for example, short life asset elections?
- Are the time limits in which you can make and amend a claim clear, and fit naturally with the processes for making and amending tax returns?
- Are there any issues that arise with respect to ‘disclaiming’ (delaying the use of) available capital allowances? Is it still necessary or desirable for this to be possible?
- Have you ever encountered any difficulties or complexities in making an s.198 election?
- The OTS has heard that very often a nominal amount is apportioned to fixtures when making the election. Would it potentially be simpler for S.198 elections to be removed, for example, by having a nominal or nil amount apportioned to fixtures as standard? Please provide any other suggestions you may have.
Claims for Losses
- Are there any difficulties or complexities that arise in the processes for claiming relief for losses? Are there any aspects of the process that are particularly time-consuming?
- Do these or other areas of VAT which involve claims or elections cause particular difficulties for your business? If so, do you have any suggestions as to how these could be addressed?
Links to our guides
Time limits for making claims & adjustments
What is the time limit for making a claim for capital allowances? What is the time limit for amending a capital allowances claim?
What are fixtures? How do I claim lost or unclaimed fixtures? When must fixtures be pooled?