IT SEEMS THAT the publication of the Finance Bill will put more pressure on paper stock, and will leave many tempted to access it purely online.
Coming in at 670 pages, the bill is believed to be the longest on record. Advisors are unimpressed, making it near impossible for parliament to provide scrutiny.
“That means full and proper scrutiny before publication is vital,” said CIoT president Anthony Thomas.
Little time for scrutiny means that the proposed changes require lengthy and through consultation. For the most part, tax experts believe this has taken place.
Big tax issues around controlled foreign companies and patent box rules were given time to be formed.
But, as Thomas suggests, the child benefit withdrawal charge was “exposed” for the first time in the bill.
Such a large bill puts the government’s policy of simplifying the tax system in some doubt.
“As the Office of Tax Simplification (OTS) battles to streamline the already complex landscape, the government has issued an eye watering three volumes of legislative bloating as the primary rules grow and grow. Their task was tough before; it’s now becoming near impossible,” said Grant Thornton head of tax Francesca Lagerberg.
Other aspects of the bill were more welcome. Amendments to the legislation have allowed non-doms to make investments in the UK without triggering a tax charge.
“The availability of this new relief is likely to substantially increase the amount that non-UK domiciled individuals are willing to invest here, which should make the UK more attractive as a location to do business,” said Ernst & Young private client services partner Carolyn Steppler.
“However, it’s only the left the door to the UK ajar rather than fully open. The bad news is that it remains a complicated relief to navigate. The conditions applying to the investment both before and after it has been made, has created a number of traps for the unwary, which could lead to unexpected tax bills.
“Overall, this legislation represents a real step forward in attracting inward investment.”
Upcoming issues flagged up in the Budget are at the forefront of ACCA head of tax Chas Roy-Chowdhury’s thoughts.
With stamp duty land tax rules to be put in place to effectively stop individuals using corporate structures to avoid tax, Roy-Chowdhury wants the May consultation to consider making sure the net is not spread too wide.
There are individuals that run businesses where property ownership is key. The government must make sure that genuine businesses are not hit by the incoming SDLT rules, he believes.
With some form of cash accounting for tax filing purposes likely to be introduced for micro-businesses, Roy-Chowdhury is concerned that they will think they can put their accounts together themselves.
Those businesses will miss out on having proactive accountants help them manage their finances, he says.
“[Accountants] that prepare tax returns for clients have the chance to give them a health check,” says Roy-Chowdhury.
If clients pay more to engage with their advisor beyond just once-a-year tax filing then they will receive better engagement, he adds.
Image credit: Shutterstock
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