Current tax consultations as at 1 June 2019

Julian Harris

June 6, 2019

Open consultations

Draft regulations: Offshore Receipts in respect of Intangible property

HMRC

Closing date: 19 July 2019

This technical consultation involves the draft Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019. The draft regulations amend ITTOIA 2005, Ch 2A, Pt 5 (Offshore Receipts in respect of Intangible Property) – the ORIP legislation – which was introduced by the Finance Act 2019. ORIP imposes income tax on amounts received by persons resident in low tax jurisdictions for intangible property such as brands, patents and copyrights. The draft regulations seek to amend ORIP to prevent multinational groups from achieving artificially low rates of income derived from UK sales by holding intangible property in low-tax jurisdictions.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/803270/_Draft__ITTOIA_2005__Amendments_to_Chapter_2A_of_Part_5__Regulations_2019.pdf


Social Investment Tax Relief: call for evidence

HM Treasury

Closing date: 17 July 2019

Social investment tax relief (SITR) assists social enterprises not principally motivated by profit or commercial return, and was introduced because such entities are often ineligible to receive investments under existing tax-advantaged schemes. SITR was first introduced in 2014 and enlarged in 2017, but take-up has fallen below expectations; this call for evidence will help inform a decision about the future of the relief, which is subject to a sunset provision and in the absence of legislation will come to an end in 2021.

https://www.gov.uk/government/consultations/social-investment-tax-relief-call-for-evidence/social-investment-tax-relief-call-for-evidence


Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs

HMRC, HM Treasury

Closing date: 1 June 2019

The government announced at Budget 2018 that two reforms would be made to private residence relief (PRR) to take effect from 6 April 2020. The following proposed changes are detailed in the consultation, which invites views on how they will work in practice and also on some technical aspects of the PRR rules:

  • the final period exemption will be reduced from 18 months to 9 months, although the special rules that give those with a disability, and those in care, an exemption of 36 months will not change;
  • lettings relief will be reformed so that it only applies where an owner is in shared occupancy with a tenant.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790479/CGT_PRR_changes_to_ancillary_reliefs.pdf


Recently closed consultations

The following consultations terminated within the last two months and are listed in date order.

Off-payroll working rules from April 2020

HMRC

Closing date: 28 May 2019

In April 2017 the government addressed public sector non-compliance with the off-payroll working rules (IR35) by reforming the relevant legislation. The government announced at Budget 2018 that it would extend these reforms to engagements in the private sector from April 2020, and this policy paper and consultation document requests views/information on subjects including:

  • the scope of the reform and impact on non-corporate engagers;
  • information requirements for engagers, fee-payers and personal service companies; and
  • addressing disagreements over status.

Protecting your taxes in insolvency

HMRC

Closing date: 27 May 2019

Legislation will be introduced in the Finance Bill 2019/20 to make HMRC a secondary preferential creditor for certain tax debts paid by employees and customers on the insolvency of a business. The effect of this will be to move HMRC up the creditor hierarchy for the distribution of assets for taxes held by businesses (including partnerships and individuals) on behalf of their customers and employees. The changes apply to VAT, PAYE (including student loan repayments), employee NICs and Construction Industry Scheme (CIS) deductions; HMRC, which wants to hear how the reform should be implemented, will remain an unsecured creditor for taxes levied directly on business such as corporation tax and employer NICs.


Preventing abuse of the R&D tax relief for SMEs

HM Treasury, HMRC

Closing date: 24 May 2019

In Budget 2018 the government announced that in order to help prevent abuse of research and development (R&D) tax relief for small and medium-sized companies (SMEs), the amount of payable tax credit that a qualifying loss-making business could receive through the relief in any one accounting period will be capped. The cap will be three times the company’s total PAYE and NICs liability for that year, and will be implemented from April 2020 (after legislation in Finance Bill 2019/20). This consultation examines how the cap will be applied in order to minimise any impact on genuine businesses.


Plastic packaging tax: consultation

HM Treasury

Closing date: 12 May 2019

The government intends to introduce a new tax on plastic packaging. The tax, announced in Budget 2018, will take effect from April 2022 and apply to businesses producing or importing plastic packaging (as defined by the tax) with less than 30 per cent recycled content. Views are sought on the design of the tax, and answers to questions including:

  • how to define products within the scope of charge;
  • the precise point at which the tax is charged and who will be liable to pay; and
  • how businesses can demonstrate the recycled content of their packaging products without being faced with unnecessary administrative burdens.

Consultation on reforming the UK packaging producer responsibility system

Department for Environment, Food & Rural Affairs

Closing date: 13 May 2019

This parallel exercise to the plastic packaging tax consultation (above) is concerned with proposed reforms to the Packaging Producer Responsibility Regulations which will encourage businesses to design and use plastic packaging that is easier to recycle. Respondents are asked to complete an online survey.


Stamp Duty Land Tax: non-UK resident surcharge consultation

HM Treasury, HMRC

Closing date: 6 May 2019

Evidence suggests that the purchase of property by non-UK residents is pushing up house prices for UK residents. The subject of this consultation is the government’s proposal for a stamp duty land tax (SDLT) surcharge of 1 per cent on top of all existing SDLT rates for purchases of residential property made by non-UK resident individuals and certain non-natural persons.


Draft legislation: VAT (Reduced Rate) (Energy-Saving Materials) Order 2019

HMRC

Closing date: 3 May 2019

Views are sought on the above draft statutory instrument amending the scope of VAT relief for the installation of energy-saving materials in residential accommodation to ensure consistency with EU law.


Draft legislation detailing a new capital allowance for new non-residential structures and buildings

HMRC, HM Treasury

Closing date: 24 April 2019

The structures and buildings allowance, announced at Budget 2018, is designed to support business investment in new non-residential structures and buildings and to enhance tax relief for such assets. The published document comprises an introductory note on the scope and design of the new allowance, and draft secondary legislation. Consultation responses will be published in May.


Amendment to VAT Regulation 38: Statutory Instrument technical consultation

HMRC

Closing date: 15 April 2019

Views are sought on the draft Value Added Tax (Amendment) Regulations 2019, which make changes to reg 38 of the Value Added Tax Regulations 1995 (SI 1995/2518) and consequential amendments to regs 24 and 15.