On its 'Tax Administration and Maintenance Day', last week, the government published a number of tax policy proposals and consultations to support its plan to simplify and modernise the tax system, tackle non-compliance and make the tax system fairer. We take a closer look at some of the new proposals. Next week we will look at proposals for developing the tax administration framework.
Controlling rogue tax refund agents
As announced at Budget 2023, new legislation aims to protect customers from the unscrupulous tax agents who overcharge and keep their tax refunds: taxpayers can no longer assign their Income Tax repayments
- From 2 May 2023 tax repayment agents must register with HMRC for an agent services account.
- This applies to all tax agents charging a fee for submitting Income Tax or PAYE repayments claims on behalf of others.
- Agents have until 2 August 2023 to register.
- See Budget 2023: Voiding assignments to Tax agents
New consultations
New powers: Information and data
- HMRC's new 'The Tax Administration Framework review – information and data', explores options for substantially widening and updating HMRC's information and data-gathering powers. Highlights of the review include:
- Co-joining data information requests from both companies and their owners.
- Amending its powers to allow it to obtain data from cloud applications and data centres.
- Considering what the taxpayer's obligations should be in respect of pre-populated tax returns.
- The call for evidence closes on 20 July 2023 and responses should be sent to
This email address is being protected from spambots. You need JavaScript enabled to view it.
See The Tax Administration Framework review – information and data
Help to Save
- A new consultation has been launched by HM Treasury which explores how the Help to Save scheme can be simplified and reformed to ensure it is a well-utilised, simple and effective savings product.
- Consultation questions are in five broad areas:
- Eligibility for the Help to Save savings account.
- Process for paying into the account.
- Length of time for which an account can be open.
- Structure of the bonus payments.
- Options for encouraging a continued savings habit when the account closes.
- The consultation closes on 22 June 2023.
See Help to Save Reform consultation
Cryptocurrency
- The HMRC consultation 'The taxation of decentralised finance (DeFi) involving the lending and staking of cryptoassets’ seeks views on the proposed taxation of DeFi transactions.
- It follows responses to 'The taxation of Decentralised Finance involving the lending and staking of cryptoassets – call for evidence'.
- This new consultation proposes that where cryptoassets are loaned, the loan transaction is disregarded with any sale of rights to the loaned assets being treated as a disposal of the underlying assets and any returns from DeFi transactions being subject to Income Tax.
- The consultation closes on 22 June 2023
See Cryptoasset tax proposals aim to simplify
Construction Industry Scheme
- HMRC have opened a new consultation on reforming the Construction Industry Scheme (CIS)
- It considers whether the Gross Payment Status (GPS) statutory compliance test should be reformed to include VAT, and other potential administrative reforms involving landlords, tenants and groups.
- Proposals include:
- Granting automatic GPS to tenants.
- Mirroring the domestic reverse charge rules to exclude landlord/tenant payments from CIS.
- Changing the categories of works to allow more payments to fall outside CIS.
- Introducing a VAT group and corporation tax group relief style CIS reporting process for certain large groups who currently have to file a large number of nil CIS returns.
- The consultation closes on 20 July 2023.
See Consultation on Construction Industry Scheme reform
Promoters of tax avoidance schemes
- This new consultation from HMRC, ‘Tougher consequences for promoters of tax avoidance’ seeks views on proposals for a new criminal offence for promoters of tax avoidance who fail to comply with HMRC stop notices, and to expedite the disqualification of directors who promote tax avoidance.
- The proposed new criminal offence would operate alongside the current civil penalty regime and could result in custodial sentences.
- The proposed changes to the director disqualification rules would speed up the process by removing the need for HMRC to obtain Insolvency Service approval before going to court.
- The consultation closes on 22 June 2023
See Consultation on tougher consequences for promoters of tax avoidance
Stamp Duty and Stamp Duty Reserve Tax (SDRT)
- 'Stamp Taxes on Shares modernisation' consultation seeks views on proposals to combine Stamp Duty and Stamp Duty Reserve Tax into a single tax on shares and securities.
- The consultation closes on 22 June 2023.
See Modernising Stamp Duty and SDRT
Off-Payroll Working
- This consultation 'Off-Payroll Working (IR35): calculation of PAYE liability in cases of non-compliance' seeks views on mehtods to address over-collection of tax in cases of non-compliance.
- The proposals consider how to correct the position where an incorrect employment status determination has been made and the individual has paid tax through an intermediary believing that they were outside of the off-payroll working rules. A change could be by allowing HMRC to offset these payments against the employer's liability.
- The consultation closes on 22 June 2023. It is intended that the change would take effect from 6 April 2024.
See Consultation on Off-Payroll Working
Charities
- A consultation has been opened by HMRC looking at tax compliance for charities.
- It seeks views on:
- Tainted charity donations.
- Approved charitable investments.
- Non-charitable expenditure
- Charity filing obligations.
- The consultation closes on 20 July 2023.
See Charities tax compliance consultation
Tax Administration
Piloting and testing new legislative changes
- HMRC are seeking views on a proposed new approach to piloting and testing legislative changes in a ‘sandbox’ environment.
- Responses are required to
This email address is being protected from spambots. You need JavaScript enabled to view it. by 20 July 2023. - Consultation: The Tax Administration Framework Review – Creating innovative change through new legislative pilots
Further proposed consultations
The government intends to publish more new consultations during 2023 covering the following areas:
- Employee Ownership Trusts.
- Regulating umbrella companies and tackling non-compliance in the umbrella company market.
- Simplifying and updating the legislation on Diverted Profits Tax, Transfer Pricing and Permanent Establishments.
- Plastic Packaging Tax and allowing a new approach for calculating recycled content proportions in recycled plastics.
Useful guides on this topic
Finance Act 2023: tax update & rolling planner 2023-24
External link
Policy Paper: Summary of tax administration and maintenance: Spring 2023
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