Industry brandishes tax consultation day a “damp squib”

Industry brandishes tax consultation day a “damp squib”

Tax leaders criticise the much-anticipated consultation day following delays at the treasury

Industry brandishes tax consultation day a “damp squib”

The treasury’s anticipated tax policy and consultation day was a series of lost opportunities, according to senior tax officials.

Last Tuesday, the government published 30 tax updates, consultations and policies following its announcement in February it would postpone the release of the publications that are traditionally shared on Budget day.

We lost an opportunity on the consultation day to set out the roadmap and the rationale behind where the future tax regime is going,” says Chris Sanger, head of tax policy at EY. “They’ve done that on the administration side, and they should be doing the same on the policy side.

“It’s important for the government to rule out areas where it’s not planning to look as it is areas where it is planning to look,” he says.

The much-awaited Tax Day was a “damp squib”, according to Stephen Martin, director of corporate tax at Old Mill.

“The day was more memorable for what was not mentioned,” said Martin in an email. “There was nothing on capital gains tax despite the Office for Tax Simplification recommending an alignment to Income Tax rates last November.”

“Indeed, no consultations on the raising of rates for Income Tax, National Insurance or VAT. For now, it seems, the only change in tax rate will be the increase in the corporation tax rate to 25% proposed for April 2023. At least for now.”

The consultations were mainly a “’spring clean’ exercise” for existing consultations but also introduced new proposals including simplifying inheritance tax reporting which will “significantly reduce” the admin burden for thousands of estates, according to Amanda Tickel, head of tax policy at Deloitte, in an email.

“Many of the consultations seem to lean towards simplification and requirements for better documentation, which is likely to be a welcome result for many businesses,” said Lee Holloway, tax partner at Grant Thornton UK, in an email. “However, given the number of consultations announced, there is quite a significant amount of information for businesses to process and it will take time for them to work through the details.”

“We’ve seen a real step change in the whole mentality of where the UK is going from a corporate tax perspective, what we really need to have now is a proper roadmap that sets out the parameters of what gave rise to the government making that choice,” adds EY’s Sanger.

“The consultations underline the government’s desire to make better use of technology not only to simplify the tax system but also to help close the £31bn annual tax gap,” said Marissa Thomas, head of tax at PwC, in an email.

“The current tax administration system is made up of a patchwork of different processes – almost every area of tax has its own set of rules,” said Thomas. “The challenge now is to unravel decades of tweaks and changes, which have each added their own layer of complexity.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource