Tax Day Update

23 March 2021 was dubbed ‘tax day’ when the government announced more than 30 tax updates separate from the budget. Cambridge Finance offers a summary of these updates that may affect its delegates.

Taxation is part of life, none of us like it but it necessary, hopefully, this update and the ten-year plan that had been set in motion will make the system clearer and simpler to use. Any change is feared but it is time our taxation system got a facelift and let’s face it with all the pandemic costs to cover, taxes need to raise more funds.

• Air passenger duty consultation on proposed changes published. The proposed changes include cutting tax on domestic flights and hopes to support UK’s commitment to zero emissions by 2050, this involves a distance-related tax.
• Call for evidence on the tax administration framework, aimed at creating a trusted, modern tax admin system that is simpler and meets taxpayer’s needs.
  • Making Tax Digital (MTD) Smaller VAT registered businesses from April 2022 and for Income Tax self-assessment from April 2023
  • Investment in digital infrastructure of £95million
  • Announcement of exploration into more frequent payment of income tax for the self-employed and corporation tax
• Interim report on governments fundamental review of business rates, final report to be published in the autumn.
• A tightening of tax rules surrounding second homes being registered as holiday lets.
• Inheritance tax red tape cut, over 90% of non-taxpaying estates will no longer have to complete inheritance tax forms when probate is required (from January 2022).

The announcement also included a committment to clamping down on non-compliance:

• Clamping down on promoters of tax avoidance including HMRC’s ability to freeze or secure a promoters assets so that penalties due are secured.
• Tackling disguised remuneration tax avoidance
• Off-payroll working rules
• Residential Property Developer Tax – consultation to be published, this tax will be introduced in 2022 to help pay for the costs of cladding remediation.
• A review of the taxation of trusts is to be published
• Simplification of the land and property VAT rules – call for evidence due soon