The UK government’s postponement of tax consultations and calls for evidence until March 23 could suggest “some fairly radical proposals coming down the line”, according to Chris Sanger, head of tax policy at EY.
“The announcement moves us from the crash-bang-wallop of a Budget, to a three-movement symphony of Budget Day, Finance Bill Day and now Consultation Day,” said Sanger in an email.
The UK Treasury confirmed documents and consultations on changes to the tax system are to be published at the end of March instead of at the Budget, allowing for “greater visibility” and a “greater scope of scrutiny”, according to Jesse Norman, financial secretary to the Treasury.
Several of the consultations are an important part of the government’s 10-year tax administrations strategy.
“We are making these announcements separately to the Budget, but still all on a single day, in order to give a range of important but less high profile measures greater visibility among Members of Parliament, tax professionals and other stakeholders, and greater scope for scrutiny by them,” said Norman in a statement.
None of the announcements will require legislation in the next Finance Bill or impact the government’s finances.
“A separate ‘tax day’ makes sense,” said Amanda Tickel, head of tax policy at Deloitte, in an email. “The main focus on Budget day will be on immediate measures. This allows time to digest the Budget and give proper attention to consultations on future tax policy.
“It does suggest we should expect a higher level of tax consultations this year, leading to a fuller than usual Autumn Statement as conclusions are drawn later in 2021.”
“Planning for major tax changes in the current environment presents a serious challenge,” said Vicki Heard, head of tax at KPMG UK, in an email. “Given the Chancellor’s desire to avoid dampening confidence in the short term, the delay is understandable and will provide much-needed time for the government to consult and take the best course of action for economic recovery.
“Adopting a thorough consultation approach – rather than rushing through reform – enables the impact of any reform to be properly assessed first and allows the Government to ensure any proposal will deliver on their objectives.”
Over the last few Budgets, consultations on future tax policies have “been slowly drip fed following the big day”, said Sanger. “This has led to much uncertainty as to when these important documents were going to be released, and risked the consultations being lost amidst other publications.”
“The two-week window may allow the Government to gauge the reactions to the high-level messages and hints given by the Chancellor at the despatch box, and potentially to change the content of the consultations,” Sanger added.
The Treasury confirmed, in a separate announcement, an interim report on business rates will be published on March 23. The final report will be published in Autumn “when there is more economic certainty”.