22 July 2020
‘The times they are a changing’ sang Bob Dylan. I don’t suppose he had early 21st century UK tax policy and administration in mind, but if he did, then he wasn’t wrong.
Regular readers of our blogs will remember much furore around the proposed introduction of Making Tax Digital (MTD) for income tax a few years ago. This new regime was well intentioned and had a great deal of potential merit but did not seem terribly well thought through and had the feel of being rushed in half baked, attracting criticism from all quarters.
In the end it was quietly sidelined in favour of the (now operational) MTD for VAT before personnel in HMRC were re-directed, firstly to dealing with Brexit and subsequently with COVID-19. Most practitioners considered that the can had been heftily kicked down the road, not to be seen for several more years.
Several years (well, two or three anyway) have now passed and MTD for income tax has just released its comeback album in the form of a 10 year vision statement published by Financial Secretary to the Treasury Jesse Norman.
Like the original MTD, there is much to like about the vision. Simplicity, certainty, and careful incremental change are all bandied about within the document. But like the original plan there is a great deal of complexity to be thought about before any changes are brought into law, and the initial major concern about this plan is the intention to make it mandatory rather than voluntary.
The document introduces April 2023 as a target start date for the self-employed and (property) landlords to start quarterly reporting under MTD for income tax and at this stage, it’s probably not worth going into any more detail than that.
Instead, a couple of other observations. Last week we blogged about consultation on CGT reform. Since then, there has been a Public Accounts Committee document slamming HMRC in regards to their control and measurement of tax reliefs, supported by the CIOT. And a Treasury Committee has launched a tax after Coronavirus inquiry to consider the future of the UK tax base. Further consultations and calls for evidence are anticipated over the course of the summer.
So not today or tomorrow, and perhaps not this year or next, but change and reform of the UK tax system seems now to be very much back on the Government agenda.
Watch this space.
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