As promised, on 23 March 2021, the Government published a raft of consultations, reviews and other tax policy updates as part of what has become widely known as “Tax Day”. For some time, we have expected the core focus of the documents issued to be on tax administration and building a tax system fit for the 21st century and, in particular, fit for the digital age. This largely seems to be the case. The Government continues to be committed to the increasing digitalisation of the tax system through initiatives such as Making Tax Digital and providing one ‘tax account’ for a taxpayer making it easier to submit tax information and pay taxes.
As expected there is a second consultation on the uncertain tax treatment notification requirement for large businesses. The revised proposals seek to address feedback received during the first consultation on minimising the uncertainty and administrative burden for taxpayers whilst still achieving the policy objective of improving the speed and efficiency of inventions by HMRC. The consultation on updating the UK transfer pricing documentation requirements includes proposals for a new international dealings schedule to enable HMRC to adopt a more data-driven approach to risk assessing transfer pricing.
There was little meat on the bones in terms of future policy direction. There were no substantial announcements around an online sales tax, the taxation of private assets, environmental taxes, pensions tax relief or how workers are taxed. The interim report on Business Rates was also just a summary of the responses received to the consultation and offered little in terms of any indication of the potential fundamental changes to business rates in the medium to long term. The expected second 2021 Budget in the autumn could therefore be a very significant one for the taxation of businesses and individuals.