A round up of other news this week.
At the time of writing, there has been no relaxation of the forthcoming deadline for submission of self-assessment (SA) returns. On 18 December 2020, HMRC replied to the Professional Bodies’ requests for an extension and, although confirming that the position is to be kept under review, they have subsequently resisted further calls by the Professional Bodies and other working groups for an easement of the 31 January 2021 filing date. HMRC are “encouraging as many taxpayers as possible to complete their returns by 31 January 2021 even if they cannot pay in full”. It is interesting to note that one reasons given for this decision is “because filing their return is key to … being able to get support, if they need it”. HMRC have highlighted concerns that “de-coupling payment and filing dates might confuse [taxpayers] and lead to non-payment of tax, interest accruing and late payment penalties being triggered”. HMRC have confirmed that “no-one will have to pay a penalty if they cannot file on time because of the impact of the COVID-19 pandemic”. Penalty notices will be issued as usual to all who file late, but for those affected by the pandemic more time will be allowed to appeal such notices, with the normal 30 day appeal penalty period extended to three months. HMRC “will accept pandemic-related personal or business disruption as a reasonable excuse. If [the taxpayer’s] return is late due to pandemic-related delay on the part of an agent, this will also be a valid reasonable excuse.”
As highlighted in our earlier article commenting on the Chancellor’s 24 September 2020 Winter Economy Plan, for SA taxpayers who are finding it difficult to pay due to the impact of coronavirus, the Government confirmed that it “will give the self-employed and other taxpayers more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020”. Taxpayers with up to £30,000 of tax due who wish to defer for up to 12 months (i.e. to 31 January 2022) can do this online using HMRC’s self-service Time to Pay facility; and taxpayers with over £30,000 of tax due, or who wish to defer for longer than 12 months or who cannot use the online service can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
HM Treasury has issued guidance for businesses that wish to repay any business rates relief received in 2020-21. The guidance also confirms that the Government intends to legislate that repayments of business rates relief, should be deductible for tax purposes on the basis that repayments should be treated as if they were business rates payments. The guidance adds that the Government intends to specify that the tax deduction should be taken in the period which the original payment of business rates would have related to.
In December 2020 the Cabinet Office published a Green Paper on ‘Transforming public procurement’. The proposals, which aim to simplify the Government’s procurement process, include changes to the scope of the mandatory and discretionary exclusions which prevent businesses from participating in a procurement process. Included in these proposals are certain changes relevant to tax including amending the treatment of non-payment of taxes, considering how tax evasion could be included as a discretionary exclusion and a new mandatory exclusion relating to the non-disclosure of beneficial ownership. Whilst the proposals have yet to be finalised, going forward it is likely to be even more important for all organisations who are looking to engage with Public Sector bodies through procurement channels to ensure that they can demonstrate a clean bill of health on their own tax affairs to avoid exclusion from a bidding process.
The Office of Tax Simplification (OTS) has outlined the scope of a new review of third party data reporting in response to HMRC’s ambition to make smarter use of data for the pre-population of tax returns set out in their ten-year Tax Administration Strategy. The review will focus on personal tax data and will consider the sources of third-party data that it could be helpful to individuals for HMRC to receive such as bank and building society interest and dividends. It will also look at the principles that should apply in relation to third-party data and taxpayers generally. The OTS intends to publish a call for evidence shortly with a report outlining its findings in Summer 2021.
The Welsh Government published its Draft Budget for 2021-2022 on 21 December 2020. This included an announcement on changes to Land Transaction Tax (LTT) rates. With effect from 22 December 2020, the nil rate band for non-residential properties increased from £150,000 to £225,000 and the surcharge rates for additional residential properties increased by one percent. Transitional provisions apply. It was also confirmed that the current LTT holiday on residential properties, which temporarily increased the nil rate band from £180,000 to £250,000 (which only applies to residential acquisitions that are not subject to the surcharge rates) will end on 31 March 2021.
Yael Selfin, Chief Economist KPMG in the UK, has published a report on what the future holds for towns and cities post COVID-19. The report provides an insight into which locations are likely to fare best and which will need greater investment to attract people and businesses.
The BRC-KPMG Retail Sales Monitor for December 2020 has recently been published, detailing that there was no Christmas respite as 2020 sales hit a record low.
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