In its first Tax Day, The UK government has published a number of consultations and calls for evidence on a range of tax administration and policymaking areas. Most of the documents relate to the Tax Administration Strategy announcement in July 2020 and the government’s wider 10 year plan. There were updates relating to improvements in the tax system, notably business rates and environmental taxes, as well as a range of simplification measures.
The 23 March is a red letter day for everyone who is interested in the tax system; be they tax advisers or tax payers. Instead of releasing a mass of documentation and consultations on the day of the Budget, for the first time this year the government have dedicated a specific day to release this key information. Their objective is to create greater visibility and transparency with the overall aim to increase the quality of tax policy and legislation
As part of today’s release, the government has announced its intention to tighten tax rules for second home owners and close off their ability to register for business rates if their property is not a genuine holiday letting business. Many holiday lets are liable to pay business rates, not council tax, when an owner declares their intention to let their property in the next year. They may also be able to claim relief of up to 100%. The change will close off this ability to reduce their tax liability where they are not a genuine holiday let business.
Administration around inheritance tax will also be simplified. Over 90% of non-taxpaying estates each year will no longer have to complete inheritance tax forms when probate or confirmation is required from 1 January 2022.
The government also plans to cut the rate of domestic Air Passenger Duty. The consultation also touches on supporting the UK’s commitment to net zero emissions by 2050 through increasing the number of international distance bands.
Views are being canvassed on how the legislation underpinning HMRC’s administration of the tax system could be updated to make the tax system easier to deal with. As well as investigating simplification changes, the government are also seeking to establish how the system can become more resilient and better equipped to respond to future crises.
The publication of an Interim Report on Business Rates was also released and will be followed up in the Autumn with the final report on the Fundamental Review of Business Rates when it is anticipated there is more economic certainty.
More information relating to the releases can be found on the government’s website.