HMRC flags potential costs of Brexit contingency planning

Uncertainty over the outcome of negotiations on the UK’s post-Brexit customs arrangements may force HM Revenue & Customs and traders to incur expenditure that could turn out to be unnecessary, officials told the House of Commons Treasury Committee September 14.

Committee Chair Nicky Morgan asked Jim Harra, HMRC’s director general for customer strategy and tax design, when he would need to know the outcome of negotiations with the EU-27 countries, which have not yet begun, to be able to start “putting things in place.”

“We’ve been advising the Department for Exiting the European Union and advising ministers on what the choices are . . . and the future partnership paper has been produced,” Harra said. The UK government’s proposals for a future customs relationship with the EU, published August 15, outline two broad approaches … Read more:

My news story for Tax Analysts, September 15 (paywall)

UK invites feedback on tax measures for 2018

HM Treasury and HM Revenue & Customs are consulting on draft legislation for the UK’s next finance bill, which will form part of the 2018 Finance Act.

Eight consultations were published September 13, a day after members of Parliament approved the second finance bill of 2017, which will now proceed to its committee stage.

The new consultations relate to the bank levy, disguised remuneration avoidance schemes, interest on debt traded on a multilateral trading facility, landfill tax, offshore trusts, income tax for partnerships, registration of pension schemes, and payments on termination of employment. Draft legislation, explanatory notes, and tax information and impact notes are provided, and comments are invited by October 25. Read more:

My news story for Tax Analysts, September 14 (paywall)

UK lawmakers approve finance bill as Brexit overshadows debate

Members of Parliament approved the UK’s second finance bill of 2017, voting 320 to 299 after six hours of debate at the bill’s second reading September 12.

The bill will now proceed to its committee stage in October, after a three-week recess for the annual political party conferences. It is expected to become the second finance act of 2017 in November. Read more:

My news story for Tax Analysts, September 14 (paywall)

Parliament website: Finance Bill 2017-19

UK tax professionals voice dismay at 665-page finance bill

The complexity of the UK tax code is out of control, and principles of certainty and proportionality are being sacrificed, tax professionals warned after the publication of a 665-page finance bill days before a scheduled debate by members of Parliament …

Draft clauses for a further finance bill, to be published after the autumn budget and to be enacted in Finance Act 2018, will be published for consultation on September 13 …

Tax professionals expressed dismay at the length of the bill published on September 8 …

Jeremy Cape, partner at Squire Patton Boggs, told Tax Analysts that the bill includes provisions that mark significant changes of direction for the U.K.’s tax code.

“The reason these measures were dropped [in April] was to ensure that they would be afforded proper parliamentary scrutiny once reintroduced,” Cape said. “That seems extremely ambitious and unlikely.” The Brexit process and the unexpected general election result have caused pressure on the parliamentary timetable to grow to the point where such scrutiny is “a mere pipe dream,” he said. Read more:

My news story for Tax Analysts, September 9 (paywall)

UK government set to consult on tax measures for 2018

Draft clauses for a finance bill to be introduced after the UK’s autumn budget will be published for consultation on September 13 as part of the transition to a new budget timetable.

The consultation on the measures earmarked for Finance Act 2018 will be open until October 25. “The transition means there are fewer clauses than in recent years, but pre-legislative scrutiny will again help consideration of the bill,” said Mel Stride, financial secretary to the Treasury.

Disruption caused by the general election contributed to an unusually high number of retrospective tax measures earmarked for the second finance bill of 2017, expected to be published on September 8, he told members of Parliament. Read more:

My news story for Tax Analysts, September 8 (paywall)

UK think tank urges debate on progressive taxation

Tax is a hidden issue in British public debate, but the system is ripe for reform, and there is an urgent need for change in the economy amid uncertainty over the impact of Brexit, according to a report commissioned by the Institute for Public Policy Research.

The IPPR Commission on Economic Justice is calling for “an urgent public debate on taxation, the role of the financial sector, the power of trade unions, and the market dominance of digital companies such as Amazon, Facebook and Google.”

The commission is exploring how the tax system can be simplified and made more progressive, and how wealth can be more fairly taxed …

New models for taxing “international digital companies” — for example, on the basis of revenues rather than reported profit — are also being explored. The report notes that UK corporation tax can “largely be avoided by internet platform companies and other multinational businesses.” The report does not mention the OECD’s base erosion and profit-shifting project, however. Read more:

My news story for Tax Analysts, September 7 (paywall)