Spring Budget 2017: tax consultations planned for Spring 2017

The Treasury has also announced at least 10 different reviews into current tax policy including long-term capital finance, state pension age, tax compliance and risk at large businesses, and the penalties regime for Making Tax Digital

It is expected that final details on all of these policy reviews will be published in time for the autumn Budget.

The main topics for review include:

Making tax digital review – the government will also consult on the design aspects of the tax administration system, including interest and penalties, with the aim of adopting a consistent approach across taxes. The consultation will be published on 20 March.

HMRC large business risk review – HMRC will work constructively with businesses and interested parties to consult over the summer on its process for risk profiling large businesses and promoting stronger compliance. The consultation will be released ahead of the summer recess of parllament in July 2017.

Taxation of benefits in kind – the government will publish a call for evidence on exemptions and valuation methodology for the income tax and employer NICs treatment of benefits in kind in yet another bid ‘to better understand whether their use in the tax system can be made fairer and more consistent’.

Accommodation benefits – a consultation on proposals to bring the tax treatment of employer-provided accommodation and board and lodgings up to date. This will include proposals for when accommodation should be exempt from tax and to support taxpayers during any transition.

Employee expenses – the government will publish a call for evidence to better understand the use of the income tax relief for employees’ expenses, including those that are not reimbursed by their employer.

Partnership taxation and proposals to clarify tax treatment: the government still plans to publish a response document and draft legislation to clarify and improve aspects of partnership taxation. The government intends to legislate in Finance Bill 2017-18.

Plant and machinery leasing – response to lease accounting changes: summer consultation planned to meet new reporting requirements under IFRS 16 Leases, which comes into effect on 1 January 2019. The government intends to maintain the current system of lease taxation by making legislative changes which enable the rules to continue to work as intended.

Withholding tax on interest – plan to extend the current scheme with an exemption for debt traded on a multilateral trading facility. Consultation on exemptions process set for spring 2017

Patient capital review – The review aims to ensure that high growth businesses can access long-term capital to fund productivity enhancing investment. Alongside identifying barriers to institutional investment in long-term finance, the review will also consider existing tax reliefs aimed at encouraging investment and entrepreneurship to make sure that they are effective and well targeted.

Tax for late-life oil and gas assets – the government will publish a formal discussion paper alongside the Finance Bill on the case for allowing transfers of tax history between buyers and sellers. To maximise economic recovery the fiscal regime needs to ensure support for the transfer of late-life assets.

Research and development (R&D) tax review - announced at the Autumn Statement but this has made no definitive conclusions, and the Green Book issued on Budget day on 8 March indicates that this review will be ongoing. The current system is over-complicated and has too many barriers for smaller businesses and SMEs to take advantage of the tax reliefs available.

State pension age review - the government is carrying out the first statutory review of State Pension age. The government will consider all the evidence – including an independent report by John Cridland – before publishing its review by 7 May 2017.

Parental benefits for self employed - the government will consider whether there is a case for greater parity in parental benefits between the employed and self-employed, in advance of the publication of the Taylor review into the gig economy and working habits.

Rent-a-room relief – plan to consult on proposals to redesign rent-a-room relief, to ensure it is better targeted to support longer-term lettings. This will align the relief more closely with its intended purpose, to increase supply of affordable long-term lodgings

Landfill tax - consultation on extending the scope of Landfill Tax to illegal disposals of waste made without the required permit or licence.

VAT: Fraud in the provision of labour in the construction sector – The government will consult on options to combat missing trader VAT fraud in the provision of labour in the construction sector, in particular, applying the reverse charge mechanism so the recipient accounts for VAT.

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