Consultations: Jan - March 2018

A roundup of current consultations from HMRC, including Making Tax Digital for VAT, rent a room relief, royalties withholding tax, Making Tax Digital interest harmonisation and sanctions for late payment

Value Added Tax (Amendment) Regulations 2018 - draft legislation

Issue date: 18 December 2018

Closing date: 9 February 2018

HMRC has issued a seven-week consultation on the draft legislation for VAT reporting under Making Tax Digital, due to come into force from April 2019 for businesses registered for VAT at the £85,000 threshold. In addition there is a proposed addendum to the draft VAT Notice, setting out how businesses could use compatible software alongside spreadsheets to provide VAT returns. There is no clarification about free software provision.

Taxing gains made by non-residents on UK immovable property

Issue date: 22 November 2017

Closing date: 16 February 2018

Consultation on the tax treatment of gains accruing on disposals of interests in UK immovable property by non-residents. A call for feedback on proposals for the intended scope of new rules to charge non-residents tax on gains realised from disposal of interests in UK property. This consultation also looks at the future of the rules applying to annual tax on enveloped dwelling (ATED) related gains, which will predominantly affect non-residents.

Rent a room relief

Issue date: 1 December 2017

Closing date: 23 February 2018

As part of a review of property tax reliefs, the Treasury has released a wide-ranging consultation on the future of rent a room relief for individual landlords and online room booking services, which could see an overhaul of the current rules, which were introduced 25 years ago pre-internet. The government is considering whether to change the qualification for the tax relief so that it can only be used to ‘support residential accommodation provided on a longer-term basis, or for a certain purpose’.

Royalties withholding tax

Issue date: 1 December 2017

Closing date: 23 February 2018

Major multinationals who operate in the digital arena and are non-resident for tax purposes are likely to be caught by new rules whereby royalties realised in the UK will be subject to tax, under draft plans set out in this Treasury consultation. The proposal considers a framework to ensure that payments made for exploitation of intellectual property or certain other rights in the UK are charged withholding tax when offshoring profits. The measure will only apply to payments between connected parties.

VAT and vouchers

Issue date: 1 December 2017

Closing date: 23 February 2018

HMRC consultation about updating VAT legislation for vouchers, including gift cards and electronic vouchers, to bring it up to date with the revised EU VAT directive. Under new simplified EU rules, there will no longer be a separate supply of a voucher for VAT purposes. Instead there will only be the supply of the underlying goods or services, which will be handed over or provided at a later date.

Making Tax Digital: interest harmonisation and sanctions for late payment

Issue date: 1 December 2017

Closing date: 2 March 2018

HMRC is consulting on ways to simplify the range of penalties, sanctions and rates of interest across the main taxes, income tax self assessment, corporation tax and VAT as part of its Making Tax Digital initiative. The government is proposing a new hybrid model that combines a ‘penalty charge element’ together with an ‘interest’ type calculation.

Tackling the hidden economy: public sector licensing

Issue date: 8 December 2017

Closing date: 2 March 2018

HMRC consultation on plan to introduce ‘conditionality’ measures to tackle the hidden economy, which would make compliance with certain tax obligations a condition of holding some licences and introduce checks on applicants’ tax-registration status as part of licensing process.

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