Tax consultations update

Tax consultations update

New consultations, draft legislation and calls for evidence have been released, along with consultation responses.

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Not content with releasing the longest Finance Bill in history on Monday, the Government also took the opportunity to publish a great deal of other material on the same day, including a number of consultations and calls for evidence, draft legislation, and responses to previous consultations. In this article, we set out some further details of what was released.

Consultations and calls for evidence

Making Tax Digital: sanctions for late submission and late payment

The Government has proposed three possible models for late submission penalties and provided an update on late payment penalty interest. For more, read our [full article] this week.

Non-resident companies chargeable to income tax and non-resident capital gains tax

Certain non-resident companies, particularly those with UK property business, could be brought within the UK corporation tax regime. For more, read our [full article] this week.

Taxation of employee expenses 

This call for evidence asks for views on the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer.

Withholding tax exemption for debt traded on a Multilateral Trading Facility (MTF)

To make the UK more competitive for MTFs, an exemption from withholding tax has been proposed. For more, read our [full article] this week. 

Tax issues for late-life oil and gas assets

A discussion paper on the tax treatment of late-life oil and gas assets. For more, read our [full article] this week. 

VAT fraud in labour provision in construction sector

Policy and legislative options to tackle fraud on the provision of labour in the construction sector.

VAT: Tackling fraud on goods sold online - update on split payment

The Government is seeking comments on an alternative method to collect VAT known as split payment.

Landfill Tax: Extending the scope to illegal disposals

The proposal would bring illegal waste sites into the scope of Landfill Tax.

Draft legislation 

The Collective Investment Schemes and Offshore Funds Regulations 2017

This legislation sets out how investors in a co-ownership authorised contractual scheme (CoACS) or offshore transparent fund should calculate chargeable gains in respect of their investment.   HMRC have advised us of a number of formatting errors in this draft – please speak to your usual KPMG contact if you’d like further information.

The Co-ownership Authorised Contractual Schemes (Tax) Regulations 2017

This legislation introduces a requirement for operators of CoACS to provide information to investors and HMRC. The information to be provided to unitholders is not prescribed but must be ‘sufficient’ for investors to meet their UK tax obligations.

The Indirect Tax (Disclosure of Avoidance Schemes) Regulations and the Indirect Tax (Notifiable Arrangements) Regulations 

These two sets of regulations reform the indirect tax disclosure regime and widen its scope to all indirect taxes.

Landfill Tax - taxable disposal

The legislation introduces a simpler method of determining a taxable disposal.

Consultation outcomes

Partnership taxation: proposals to clarify tax treatment

The consultation response has taken on board representations from KPMG and others and pulled back from some of the Government’s original proposals which would have caused additional administrative and reporting burdens for partnerships. Legislation will be included in Finance Bill 2017-18 (to be published following Autumn Budget 2017) and changes will apply to returns for accounting periods starting on or after 5 April 2018. Draft clauses will be published for consultation at a later date.

Double Taxation Treaty Passport scheme review

The scheme will be updated on 6 April 2017 to make it available to UK borrowers that have an obligation to withhold tax (including partnerships, individuals and charities). It will also be made available to lenders that are sovereign investors, pension funds and transparent entities (provided that all of the beneficial owners are resident in the same jurisdiction and entitled to the same treaty benefits). It will not be extended to entities with mixed jurisdiction memberships. The duration of a passport will remain five years. Further details, including revised terms and conditions are expected to be released on 6 April 2017.

Stamp duty land tax: changes to the filing and payment process

The introduction of the proposed 14-day filing and payment time limit will be delayed to 2018-19 in response to concerns that this would be difficult to comply with in the case of complex commercial transactions. There was strong support for the other proposed changes and the Government will continue to explore their feasibility.

Tackling the hidden economy: sanctions

The Government is considering the design of a stronger ‘failure to notify’ hidden economy penalty, which will be introduced alongside the longer term review of the HMRC penalty system. 

Tax-advantaged venture capital schemes - streamlining the advance assurance service

The Government have stated that they plan to use the responses already given to plan further consultation work, with a full response to the consultation to be published later in the year.

 

For further information please contact :

Michelle Quest

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