The UK government is mindful of the need to avoid unintended consequences for compliant businesses if any new proposals to tackle cash-related tax evasion are adopted, HM Treasury said …
In a summary of responses to consultation, Treasury reiterated its view that Making Tax Digital will result in more accurate and timely record-keeping and said organisations have indicated support for the reform. But it acknowledged that some respondents expect action to tackle tax risks associated with cash to have a limited impact on compliance because “the dishonest minority would continue to evade tax by other means”. My story for Tax Notes (paywall), May 7:
U.K. Groups Advocate Caution in Tackling Cash-Related Evasion
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 Tax barrister Keith Gordon of Temple Tax Chambers called last October for the loan charge to be repealed, arguing that HMRC was using the charge as a way to cover up its own failure to take action “over the last 15 years.”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
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.
“While the loan charge introduced in 2017 is a means of tackling certain tax avoidance schemes, [HM Revenue & Customs] has targeted individuals who joined such schemes in good faith rather than those who enabled their very existence,” Tunnicliffe said. Ministers must “listen to and implement” the findings of that review — which are required to be reported to members of Parliament by March 30 — and others required by the amended bill, he added.
My news story for Tax Notes (paywall), published February 11, is reproduced with permission below:
U.K. Government Defies Calls to Restrict Imminent Loan Charge (PDF)
See also related posts on the loan charge.
Prime Minister Theresa May declared that she will seek “legally binding changes” to her Brexit deal after members of Parliament voted to back a new proposal to replace the Northern Ireland backstop.
But a spokesman for European Council President Donald Tusk told reporters, in response to a series of House of Commons votes late on January 29, that “the backstop is part of the withdrawal agreement, and the withdrawal agreement is not open for renegotiation”.
My news story for Tax Notes (paywall), published January 30, also published in the February 4 edition of Tax Notes International:
May to Seek ‘Binding Changes’ as MPs Oppose No-Deal Brexit