Autumn Statement 2016: Administration and HMRC
- Publish date: 25 November 2016
- Archived on: 01 January 2019
ICAEW Tax Faculty provides analysis of the announcements relating to tax administration and HMRC in the 2016 Autumn Statement.
Making Tax Digital
Those waiting to learn more about Making Tax Digital will need to wait until January 2017 for further announcements. We understand that government and HMRC are taking the time to consider and reflect properly on the huge response they have had to the recent consultations, which will include our own ICAEWREP 171/16.
HMRC performance reporting
HMRC has announced that from 2017 it will report its external performance data monthly. The level of detail will be greater and will include phone, post, digital and complaints data. This more frequent publication is welcome and, we believe, a sensible move on HMRC’s part as the reporting will become more routine, rather than a potentially more significant quarterly or annual event. A consultation on exactly what data will be published would be welcome.
Tax enquiries: closure rules
HMRC and the taxpayer will be given powers to bring enquiries under tax self assessment and CT self assessment to a close in respect of a part of an enquiry when that individual element has been brought to a conclusion even though some elements of the enquiry remain unresolved.
Office of Tax Simplification: work programme
Both the Chancellor and the Financial Secretary to the Treasury have separately written to the OTS regarding its work programme. These letters were published on 23 November: see Correspondence between the Chancellor, Financial Secretary to the Treasury and the Office of Tax Simplification regarding recent OTS publications.
The OTS has performed numerous reviews this year, including small company tax issues and the alignment of income tax and NIC alignment.
The Financial Secretary to the Treasury’s letter to the OTS reviews the current projects and announces new projects for the department to consider. She expresses thanks for work to date on the proposed sole enterprise with protected assets (SEPA) entity and looks forward to the OTS’s thoughts on the revision of the corporation tax computation in March 2017.
In addition the government has now asked the OTS to perform a review of stamp duty on share transactions and to consider simplification measures from both a technical and administrative perspective. The OTS will consider the possibility of removing the need to physically stamp paper transactions. Further details are yet to be released.
In addition to this, the OTS will undertake a review of various aspects of the VAT system, and terms of reference are expected to be published shortly. We welcome a review of VAT as this is the tax most likely to be affected by Brexit, offering opportunities for simplification where possible.
Tax simplification: alignment of national insurance and income tax
The OTS was asked in 2015 to consider all aspects regarding an alignment of income tax and national insurance together with modernising NIC for 21st century work patterns. The OTS reported in March 2016 and the then Financial Secretary to the Treasury asked for a further report looking more deeply into two particular aspects of the initial report: the calculation of employee’s NIC on an annual basis and the reform of employer’s NIC. The OTS’s second report was published on 14 November 2016.
The Chancellor has thanked the OTS for the detailed work it has undertaken. The government has concluded that rule and definition alignments of earnings and benefits-in-kind will not be considered for major revision, but it will be mindful of the complexities that can be created in writing future legislation. The Chancellor acknowledges that changing employee NIC to an annual, cumulative and aggregated basis contains potential gains, but this is considered too much of an upheaval at the moment. However, the options for reforming employer’s NIC will be reviewed further by the Treasury.