HM Revenue & Customs has come under increased pressure to reset the timetable for its Making Tax Digital (MTD) project, with tax professionals warning that small businesses will struggle with what accountants call the most far-reaching reform of the UK tax system for generations.
Last week the Chartered Institute of Taxation warned that the spirit of voluntary compliance is at stake if the government continues to pursue an unrealistic timetable for implementing compulsory digital record keeping.
“Tax systems exist for the benefit of society, not vice versa, and the business case for any change to the tax system should be based on the total economic impact, not just [aspects affecting HMRC],” the UK tax committee of the Association of Chartered Certified Accountants said as six MTD consultations closed on November 7.
Read more: My news story for Tax Analysts, 9 Novmember (paywall).
A UK tribunal has held that a group of Uber drivers were employed as “workers” for the purposes of employment rights, working time, and national minimum wage legislation.
In a lengthy statement of reasons for the judgment in Mr Y Aslam, Mr J Farrar and Others v. Uber, the tribunal judges concluded that the drivers worked for Uber and did so in a contractual relationship. “And if there is a contract with Uber, it is self-evidently not a contract under which Uber is a client or customer of a business carried on by the driver,” they said, adding that they regarded such a notion as “absurd.”
The company has indicated that it will appeal against the decision.
Read more: My news story for Tax Analysts, 29 October (paywall).
A proposed new tax system for small companies would increase uncertainty and confusion among small business owners and increase the scope for errors, UK tax experts said in response to consultation on the merits of a “look-through” model.
The UK already has two complicated systems, one for unincorporated businesses and one for corporate bodies, the ICAEW Tax Faculty noted a submission to the Office of Tax Simplification. “Rather than introduce a new model we would support simplification in each area,” the Faculty said. The Chartered Institute of Taxation said a key effect of a mandatory look-through system appeared to be to generate an increased tax yield from small business.
Read more: My news story for Tax Analysts, 8 October (paywall).
And there’s an interesting discussion on Twitter, in response to this tweet:
Proposals to shift responsibility for applying a controversial anti-avoidance rule to the public sector will impose “punitive” taxes on public sector organisations and micro-businesses, according to a trade association representing freelancers …
HMRC launched a consultation on May 26 on changes intended to improve the effectiveness of IR35.
[Read more: My news story for Tax Notes (paywall) published by Tax Analysts.]
Here is HMRC’s consultation, which closes on August 18.
This note on the importance of clear guidance on the interaction between tax-free childcare and other means of support is extracted from my recent update for Tax Adviser:
“The new childcare support landscape will be complex and we have stressed the importance of providing users with guidance that not only explains the rules of each scheme but also gives enough information for users to choose between schemes. Research published by HMRC has found ‘very strong support’ for an online calculator. However, parents – particularly those in two-parent households – often assumed they would be ineligible for [tax-free childcare]. This suggests that HMRC faces a challenge in raising awareness among parents.”
The Low Incomes Tax Reform Group provides regular technical updates for the magazine. Read more on the Tax Adviser website.
The number of people reporting themselves as self-employed in the UK has increased by 40% over the last 13 years, according to a presentation published yesterday by the Department for Business. Continue reading “Self-employment in the UK – in charts”