HMRC defends devolution record amid tax code error reports

HM Revenue & Customs defended its implementation of devolved income tax rates as tax professionals reported errors in the identification of Scottish taxpayers.

HMRC was unable to provide the National Audit Office with an action plan for the implementation of Welsh income tax, setting out “lessons learned” from the earlier implementation of Scottish income tax, the NAO said in a January 24 report. The plan was drawn up after a July 2017 event attended by HMRC staff involved in the Scottish project…

My news story for Tax Notes (free to view), published January 25:

HMRC Defends Devolution Record Amid Tax Code Error Reports

Treasury dismisses cross-party calls for loan charge delay

The UK government has rejected a call from more than 150 members of Parliament for the suspension and independent review of the controversial loan charge.

Financial Secretary to the Treasury Mel Stride insisted that the charge is not retrospective, telling MPs that “there was never a time” when the payment model used in disguised remuneration schemes was “correct within the tax rules.”

MPs concluded on April 11 a backbench business debate that was suspended on April 4 because of a water leak. A cross-party motion expressed “deep concern and regret” about the “mental and emotional impact” of the loan charge.

My news story for Tax Notes (paywall), April 12:

More than 100 MPs call for 6-month suspension of loan charge

Growing support among members of Parliament for a suspension of the controversial loan charge suggests that many MPs did not understand the legislation they passed in 2017, a leading tax professional said.

As of April 9, more than 100 MPs had signed a letter from the Loan Charge All-Party Parliamentary Group (APPG) to Financial Secretary to the Treasury Mel Stride urging him to announce that the loan charge will be suspended for six months to allow for an independent review.

“In a fair tax system, both the amount of the tax and the way it is imposed must be seen to be fair,” George Bull, senior tax partner at RSM UK, told Tax Notes, adding that while 281 Conservative MPs voted for the bill that became Finance (No. 2) Act 2017, he understands that 47 Conservatives are members of the APPG. “Based on the size of the APPG, it seems that many MPs did not understand the nature of the legislation they were enacting,” he said.

My news story for Tax Notes (now outside the paywall), April 10: More Than 100 MPs Call for 6-Month Suspension of U.K. Loan Charge

Income tax divergence adds to anomalies for Scottish taxpayers

Scottish taxpayers need to be aware of the impact of a growing divergence in rates between Scotland and the rest of the United Kingdom, according to the Chartered Institute of Taxation.

Scottish taxpayers receiving the marriage allowance will no longer be eligible for the allowance if their income exceeds the Scottish higher rate threshold of £43,430, the CIOT noted in an April 5 release …

The marriage allowance can save a couple up to £250 a year for the tax year 2019/20, which began on April 6, but concerns have already been raised about the greater impact of the divergence in tax thresholds. My news story for Tax Notes (paywall), April 9:

Income Tax Divergence Adds to Anomalies for Scottish Taxpayers

HM Treasury defends loan charge amid sustained criticism

HM Revenue & Customs is committed to supporting taxpayers affected by the imminent loan charge, but does not accept claims made in some of the testimonies shared by members of Parliament, according to HM Treasury …

The government’s approach has attracted fierce criticism from a cross-party group of MPs, as well as the House of Lords Economic Affairs Committee. Tax barrister Keith Gordon of Temple Tax Chambers called last October for the loan charge to be repealed, arguing that HMRC was using the charge as a way to cover up its own failure to take action “over the last 15 years.”

My news story for Tax Notes (paywall), March 27: U.K. Treasury Defends Loan Charge Amid Sustained Criticism

UK government defies calls to restrict imminent loan charge

Thousands of people pay tax as self-employed workers or through their company without using “highly contrived tax avoidance schemes,” a minister told peers who urged the government to limit the April 2019 loan charge. The finance bill completed its second reading and remaining stages in the House of Lords after a short debate on February 8.

Labour peer Denis Tunnicliffe welcomed the government’s decision to accept a new clause calling for a forthcoming review of extended time limits for offshore income to include a comparison of those time limits with others, including those in the controversial loan charge provisions of Finance (No. 2) Act 2017. Continue reading “UK government defies calls to restrict imminent loan charge”