Note: the closing dates of a number of consultations were extended in April to take account of the disruption caused by COVID-19. At Budget 2020, the government announced it would publish a number of other tax policy documents, and these will be issued on a case-by-case basis taking account of the impact of COVID-19 on stakeholders (see further ‘Update on tax policy documents: Written statement’, HCWS211, 28 April 2020).
The following documents involving consultation with stakeholders are among documents to be published over the summer:
- Call for evidence for the fundamental review of business rates;
- Consultation on further entitlement to use red diesel;
- Consultation on the design of a carbon emissions tax;
- Consultation on National Insurance contributions holiday for employers of veterans;
- Call for evidence as part of the post-EU exit alcohol review;
- Review of how VAT works in the public sector.
Publication of the following documents involving consultation with stakeholders will be delayed until the autumn:
- Discussion document on the wider application of tax conditionality;
- Consultation on whether qualifying R&D tax credit costs should include investments in data and cloud computing;
- Consultation on stronger penalties for tobacco tax evasion.
More detail on the publication of the following documents involving consultation with stakeholders will be provided by the government in due course:
- Consultation on aviation tax reform;
- Call for evidence on disguised remuneration schemes;
- Review of the UK funds regime;
- Consultation on the Economic Crime Levy.
VAT scheme for travel agents (evaluation)
Closing date: 14 September 2020
The views of all stakeholders are being gathered for the purpose of evaluating the rules of the special VAT scheme for travel agents and tour operators.
Vehicle Excise Duty: call for evidence
Closing date: 3 September 2020
The government is exploring ways of improving vehicle excise duty to incentivise lower-commission car purchases. In particular, it wants understand how the VED regime influences individuals and fleet car purchasers when deciding which vehicle to buy, and what bearing it has on manufacturers when deciding which models to produce. Views on the VED treatment of motorcycles are also requested.
Hybrid and other Mismatches
Closing date: 29 August 2020
The hybrid and other mismatches legislation at TIOPA 2010, Part 6A, tackles tax avoidance arrangements which take advantage of the difference in tax treatment between two or more jurisdictions. Concerns have been raised that the rules in relation to double deductions are disproportionate; the acting together rules are too widely drawn; and the impact of tax-exempt investors in hybrid entities can be disproportionate.
HMRC would like to receive comments on both the technical application of the rules and the impact of the policy as enacted.
Raising standards in the tax advice market: call for evidence
Closing date: 28 August 2020
Anyone can set up as a tax adviser, and although they must be supervised for money laundering purposes, there is no market-wide competence requirement or code of ethics except the HMRC Standard for Agents. Many of the people affected by the loan charge – imposed on users of disguised remuneration tax avoidance schemes with outstanding loan balances – were introduced to such schemes by tax advisers.
In response to the independent review of the loan charge, published on 20 December 2019, the government committed to launching this call for evidence on possible steps that could be taken to raise standards in the tax advice market.
Tackling Construction Industry Scheme Abuse
Closing date: 28 August 2020
Changes to the CIS rules are planned in order to prevent tax loss, and this consultation document:
- explains a new power to allow HMRC to correct CIS deduction amounts claimed by sub-contractors on employer returns;
- sets out changes to some CIS rules to clarify their meaning or expand their scope;
- discusses some early ideas around construction supply chains, and asks whether they would help prevent tax loss.
Taxation impacts arising from the withdrawal of LIBOR
Closing date: 28 August 2020
LIBOR (London Inter-bank Offered Rate) – one of the benchmark interest rates at which global banks lend to one another – is expected to cease after the end of 2021. Several statutory references to LIBOR that need amending have been identified. HMRC is seeking views on how these should be done, and also wants to ensure via this consultation that it fully understands the significant tax impacts that could arise from the reform of LIBOR and other benchmark rates.
Preventing abuse of the R&D tax relief for SMEs: second consultation
HM Treasury, HMRC
Closing date: 28 August 2020
This consultation was due to close on 28 May, but has been extended to give all stakeholders time to respond.
At Budget 2018 it was announced that in order to prevent abuse of research and development tax relief by SMEs, the amount of payable tax credit a qualifying loss-making business could receive would be capped at three times the company’s total PAYE and NICs liability for that year. A consultation took place in 2019. Budget 2020 disclosed that introduction of the cap would be delayed until 1 April 2021; the purpose of this second consultation is to gather reactions to changes in the design of the measure.
Notification of uncertain tax treatment by large businesses
Closing date: 27 August 2020
The government announced at Budget 2020 that businesses will be required to notify HMRC where they have adopted an uncertain tax treatment – one where a business believes that their interpretation of legislation, case law or guidance may not meet with HMRC’s agreement. Some other jurisdictions have already adopted this practice, such as the USA and Australia, where the tax authorities require notification of uncertain corporate tax treatment.
The notification requirement will apply to uncertain tax treatments in returns filed after April 2021, and the consultation seeks views on the method and detail of the notification.
Plastic Packaging Tax
Closing date: 20 August 2020
This consultation document marks the latest stage in a process which began with a call for evidence in March 2018 and has as its aim the introduction from April 2022 of a tax to encourage the use of recycled plastic instead of new plastic within packaging.
At Budget 2020 the government announced that the plastic packaging tax will apply at a rate of £200 per tonne of plastic packaging which does not contain at least 30 per cent recycled plastic. The scope of the tax will be extended to imported filled packaging that does not contain at least 30 per cent recycled plastic content. Businesses that manufacture or import less than 10 tonnes of plastic packaging will be exempt.
Comments are required on the new areas of tax design contained in the document.
Tax treatment of asset holding companies in alternative fund structures
Closing date: 19 August 2020
The government has been made aware of concerns that UK corporation tax rules are acting as a barrier to the establishment in this country of holding companies within certain investment fund structures. The UK asset management sector is the largest in Europe and the second largest globally, with assets valued at around £9.1 trillion under management. This consultation is looking to improve the government’s understanding of asset holding companies (AHCs) within fund structures with a view to the introduction of tax reforms in order to keep the UK competitive and discourage AHCs from being located abroad.
Closing date: 15 August 2020
The HMRC Charter sets out the standard of behaviour and values that HMRC aspires to when interacting with businesses and individuals. Feedback is requested on a draft revised charter due to come into effect by summer 2020 which has been written to be more focused on HMRC’s commitments to taxpayers. The draft also embraces taxpayers’ obligations to HMRC.
Draft legislation: The Value Added Tax (Refund of Tax to the Charter Trustees for Bournemouth and the Charter Trustees for Poole) Order 2020
Closing date: 28 July 2020
Two charter trustees are named by this draft statutory instrument as local authorities entitled to obtain refunds under VATA 1994, s 33(3) of VAT incurred in the course of their non-business activities. Responses are requested.
Recently closed consultations
The following consultations terminated within the last two months.
Draft legislation: Taxation of coronavirus (COVID-19) support payments
Closing date: 12 June 2020
Views are sought on the technical effectiveness of draft legislation introducing rules on the taxation of coronavirus business support grants. These grants are to be treated as income where the business is within the scope of either income tax or corporation tax. The measure also gives HMRC powers to recover payments to which recipients were not entitled.
Climate Change Agreements: proposal for scheme extension and views on reforms for any future scheme
HM Treasury, Department for Business, Energy & Industrial Strategy
Closing date: 11 June 2020
Climate change agreements (CCA) enable those choosing to take part to receive a discount on the climate change levy (CCL) – a tax added to electricity and fuel bill in exchange for reducing energy use and carbon dioxide emissions. This consultation calls for a response to proposals which include:
- extending the current CCA scheme by two years through the addition of a new target period, from 1 January 2021 to 31 December 2022, and extending certification for reduced rates of CCL for participants meeting obligations under the scheme to 31 March 2025; and
- re-opening the scheme, allowing eligible facilities not currently participating to join, and respondents’ initial views on potential reforms in the event of a future CCA scheme.
A consultation on the potential approach to duty- and tax-free goods arising from the UK’s new relationship with the EU
HM Treasury, HMRC
Closing date: 20 May 2020
The UK’s potential approach to duty-free and tax-free goods carried by passengers post-Brexit is considered in this consultation document. Duty-free goods comprise alcohol and tobacco products sold free of excise duty and VAT in duty-free and tax-free shops at UK entry and exit points, and on board scheduled ships and aircraft departing from, or destined for, the UK; tax-free goods, which are similarly defined, also comprise products sold as part of the VAT Retail Export Scheme.
The consultation seeks views from stakeholders to help understand the impact that changes to personal allowances and duty-free sales could have.
Claims and Elections Review – call for evidence
Office of Tax Simplification
Closing date: 8 May 2020
This call for evidence has been published in support of the OTS review of claims and elections, following publication of the scoping document. The review will primarily be concerned with how the administration of the claims and elections that are more significant or frequently used by individuals, partnerships and companies may be simplified.
In addition to seeking views on a range of general questions, the call for evidence asks specifically about issues that may affect employee expenses, capital allowances, losses and VAT, and the role of high-volume repayment agents.