Category: Recent posts

Principles Matter in Digital Economy Tax Debate, Panellists Say

Discussing the OECD’s efforts to find a global solution to tax the digital economy, tax professionals stressed the importance of establishing agreed principles and finding the right balance between simplicity and accuracy.

There is a debate between countries saying “you have to have a principle here, because everything else then hangs on the principle,” and others that advocate for work on an agreed solution because they “could never agree” on the principle, Mike Williams, director of business and international tax at HM Treasury, said during a July 5 conference hosted by the Oxford University Centre for Business Taxation.

My news story for Tax Notes (paywall), published July 9, is reproduced with permission below:

Principles Matter in Digital Economy Tax Debate, Panellists Say

 

Budget 2018: tax reliefs under scrutiny

Now that the party conferences are over, what changes to the UK tax landscape can we expect to see in the coming months?

It is not yet clear how the government will meet the prime minister’s commitment, announced in the summer, to increase National Health Service funding by £20.5bn a year in real terms by 2023. Theresa May has vowed that a post-Brexit Britain will offer the lowest rate of corporation tax in the G20, and the Conservatives pledged at the 2017 general election not to increase the level of VAT.

My article for AAT Comment, published by AAT on October 5

A tax compliance update for Tolley’s Tax Digest

My tax compliance update for the May 2018 issue of Tolley’s Tax Digest starts like this:

This Digest draws together and summarises the primary and secondary legislation, and draft income tax and VAT notices, relating to HMRC’s Making Tax Digital project. At the time of writing some commentators had suggested that the implementation of Making Tax Digital for VAT might be deferred in the light of pressures created by the Brexit process, but no announcement had been made. The Office of Tax Simplification recommended in April 2018 ‘urgent work’ to simplify the business tax system. Continue reading “A tax compliance update for Tolley’s Tax Digest”

Old versions of tax law on government website – an update

Last week HM Revenue & Customs apologised for linking to some very old legislation, in a guidance note on new criminal offences, and removed the offending links. HMRC guidance at GOV.UK does not normally include statutory references, but if that is going to change there is a clear risk that the same mistake will be made again.

Legislation.gov.uk is described as “the official place of publication for newly enacted legislation”. Great care is needed in relation to older tax legislation, including some of the major consolidation Acts.

For example, go to Income Tax Act 2007 and you’ll see a prominent warning about an apparently very large number of changes that have not yet been processed. Continue reading “Old versions of tax law on government website – an update”

HMRC guidance points to old tax law

You can find out about criminal offences relating to offshore income and assets in a new guidance note on HMRC’s website. But the guidance points to some very old tax law.

While HMRC guidance for taxpayers published on GOV.UK does not normally include statutory references, this guidance note has six.

At the time of writing, there are links to sections 7 and 8 of the Taxes Management Act 1970 as reproduced at Legislation.gov.uk, the “official place of publication for newly enacted legislation”.


UPDATE 22 March: HMRC has deleted the links to sections 7 and 8 and apologised for the error.


The problem is that while some progress has been made in processing changes enacted in annual finance acts, Legislation.gov.uk still presents the original versions of some of the key consolidation acts. The original TMA 1970, which turned 48 last week, is here. Continue reading “HMRC guidance points to old tax law”

Designing good compliance into the tax system

HM Revenue & Customs estimates the total UK tax gap, the difference between the tax collected and the amount that should be collected “in theory”, at £34bn. Just £1.7bn relates to avoidance (excluding international tax planning strategies such as profit shifting, which are being addressed slowly but multilaterally), and £6bn relates to interpretation of the law.

In contrast, criminal attacks account for around £5bn and evasion another £5bn, while £3.5bn is attributed to the “hidden economy”.

Read more: My article for AAT Comment, 12 January

Tax is really complex, but where is the law?

The Scottish budget has heaped more complexity on an already complex income tax system. There are to be two new rates for taxpayers on low and middle incomes.

Already, a UK taxpayer may have income that is charged at default rates, savings rates and Scottish rates. These rates include:

the default basic rate, the default higher rate, the default additional rate, the savings basic rate, the savings higher rate, the savings additional rate, the starting rate for savings, the savings nil rate, the dividend nil rate, the dividend ordinary rate, the dividend upper rate, and the dividend additional rate …

That list is drawn from a quick look at sections 6 to 16 of the Income Tax Act 2007, as revised, published in Tolley’s Yellow Tax Handbook. (Other handbooks are available.) Continue reading “Tax is really complex, but where is the law?”