Modernising tax administration
The government’s latest announcement has outlined the measures for its 10-year tax administration strategy.
The Tax policies and Consultations (Spring 2021) announced on 23 March 2021 indicates the next steps to deliver this strategy.
The HMRC is “building a trusted, modern tax administration system” and the document covers how it will deliver a modernised tax administration with a “flexible, resilient and responsive tax system”. Here’s an overview.
Making tax digital updates
Making Tax Digital (MTD) came into force in April 2019 for businesses with a taxable turnover above the VAT threshold.
From April 2022 there will be an extension to the legislation for smaller VAT registered owners.
There are plans to introduce MTD to Income Tax Self Assessment from April 2023. This is planned to be announced later this year.
Investment in digital infrastructure
With £95m investment announced at this year’s budget for HMRC to deliver new digital technology, this allows “development of a single digital account and single customer record”. This puts all tax in one place.
It will also enable investment in developing ways to collect and receive payments.
Call for evidence
The government will publish a call for evidence which will cover “how to make tax more straightforward to pay and harder to get wrong” in its tax administration review.
There will also be a call for evidence on timely payment. This will review the “opportunities and challenges of more frequent payment of income tax within Income Tax Self Assessment, and of corporation tax for small companies, based on in-year information”.
Inheritance tax reporting
Later this year reporting regulations are due to be simplified. The consultation paper indicates that from 1 January 2022 “over 90% of non-taxpaying estates each year will no longer have to complete inheritance tax forms for deaths when probate or confirmation is required”.
The Tax policies and Consultations (Spring 2021) also covers tackling non-compliance and lists the further tax policy announcements planned. These reviews and consultations include business rates; aviation tax; self-catering accommodation criteria for business rates; taxation of trusts; landfill tax; and Carbon Emissions Tax (CET).
You can read the full tax policies and consultations document here.
Tax services
If you have any questions about tax administration and making tax digital, get in touch with one of our accountants at Mckenzies. We offer reliable accounting services that help add value to your business.