A round up of other news this week.
During Budget 2020, the Chancellor announced a review of the existing business rates system. This included a suggestion to supplement business rates with a potential online sales tax. If imposed, such a tax would likely impact many retailers – particularly those operating an online-only business model. The precise impacts would be determined in the detail – such a policy would require careful analysis over the range of options for its design. The Government has now announced that the final report on the fundamental review of business rates has been delayed until Autumn 2021. An interim report will be published on 23 March 2021 and will include a summary of stakeholder responses. The call for evidence on business rates sought stakeholders’ views on issues including reforming the rates multiplier and alternative ways of taxing non-residential property and closed in October 2020.
Because of the impact of the COVID-19 pandemic, HMRC have announced that Self-Assessment taxpayers will not be charged the five percent late payment penalty if they pay their tax or set up a payment plan by 1 April 2021. HMRC state that ”Taxpayers should still pay in full if they can. This is the only way to stop interest accruing.” It is important to note that there is no change to the payment deadline and other obligations are not affected. A five percent late payment penalty will still be charged if tax remains outstanding, and a payment plan has not been set up, by 1 April 2021. The payment deadline for Self-Assessment is 31 January and interest is charged from 1 February on any amounts outstanding (the current rate is 2.6 percent). Normally a five percent late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. Further late payment penalties are charged at six and 12 months (August 2021 and February 2022 respectively) on tax outstanding where a payment plan has not been set up. See the Government press release: More help for Self-Assessment taxpayers.
In February the Housing Secretary announced a five-point plan which includes proposals to introduce a levy and tax on UK property developers to help pay for the Government’s efforts to remove unsafe cladding from high rise buildings post-Grenfell. One of the proposals is the introduction of a ‘Gateway 2’ developer levy that will be targeted and apply when developers seek permission to develop certain high-rise buildings in England. The other proposal is the introduction of a new tax for the UK residential property development sector, which is expected to raise at least £2 billion over a decade to help pay for cladding remediation costs. The tax will be introduced in 2022 and the Government will consult on the policy design in due course.
The OECD Forum on Tax Administration (FTA) has released a Handbook for the International Compliance Assurance Programme (ICAP), a voluntary programme for co-ordinated risk assessment and transfer pricing assurance of large multinational enterprise (MNE) groups. ICAP facilitates engagement between MNE groups and tax administrations to provide increased tax certainty through the effective use of transfer pricing documentation, the group’s Country-by-Country Report, and co-ordinated conversations. Following two pilot programmes, the first of which the UK participated in, the programme will now run in full and will be open to all FTA member tax administrations. A list of the tax administrations taking part will be published by 12 March 2021 and the parent companies of MNE groups interested in joining the programme are asked to discuss potential participation with their local tax administration in advance of the first application deadline of 30 September 2021.
KPMG’s Chris Hearld, Head of Regions in the UK, shares his perspective on the forthcoming Budget and the tax measures that privately owned businesses can expect to see as they plot their route back to business as usual.
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