Month: December 2021

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor of the Exchequer on simplifying the UK tax system. The Financial Secretary to the Treasury has recently written an extensive letter to the OTS regarding the conclusions of the first five-year review and to respond to the OTS reviews into Inheritance Tax (IHT) and Capital Gains Tax (CGT).

The letter confirms that after careful consideration, the government has decided not to make any changes to the IHT lifetime gifts rules at the current time. It was also confirmed that changes to the design and operation of CGT will be kept under review.

The government has accepted the following five recommendations from the OTS report on the technical and administrative issues with CGT:

1. Integrate the different ways of reporting and paying CGT into the Single Customer Account. This is part of a long-term strategy.
2. Extending the reporting and payment deadline for the UK Property return to 60 days. This has been completed.
3. Extending the ‘no gain no loss’ window on separation and divorce. This will be subject to consultation over the course of the next year.
4. Expanding the specific Rollover Relief rules which apply where land and buildings are acquired under Compulsory Purchase Orders (CPO). This will be subject to a final consultation. 
5. Various improvements in CGT guidance on specific areas. HMRC has already completed a review and expansion of the guidance on the UK Property Tax Return and will proceed in other areas identified in the OTS report.

The government will also consider five other recommendations by the OTS including the treatment of separate share pools, the practical operation of Private Residence Relief nominations and a review of the rules for enterprise investment schemes.

The low-emission vehicles plug-in grant can help you save up to £2,500 on the purchase price of new low-emission vehicles. The scheme was first launched in 2011 and is available across the UK with dealers using the grant towards the price of eligible new cars. The paperwork for the grant application is handled by the dealer. The scheme is open to qualifying purchases by private individuals and businesses.

HMRC publishes a list of qualifying cars and only cars listed are eligible for the grant. There are also grants available for specified motorcycles, mopeds, small vans, large vans, taxis and trucks.

The grant is available for cars with CO2 emissions lower than 50g/km and a 'zero-emission' range of at least 112km. To qualify for the grant, the cars must have an 'on the road' price cap of less than £35,000. This means that many popular environmentally friendly electric cars are not available under the scheme as their sale price exceeds the price cap.

There are separate criteria for other vehicle classes. This includes motorcycles, mopeds, small vans, large vans, taxis, small trucks and large trucks. For example, for motorcycles that have no CO2 emissions and can travel at least 50km between charges.

At the Autumn Budget 2021, it was announced that there would be a dedicated day this Autumn where the government would set out further plans to continue building a modern, simple and effective tax system. This 'day' was on 30 November 2021, and referred to by HMRC as the aptly named, Tax Administration and Maintenance Day.

A number of documents were published including:

• An update on reforms to Small Brewers Relief.
• A technical consultation setting out further detail on the conclusions to the government’s review of business rates.
• A report on Research and Development (R&D) tax reliefs, providing further details on announcements made at the Budget which included refocusing relief in the UK, targeting abuse, and supporting innovation by expanding qualifying expenditure to capture cloud and data costs. 
• A Call for Evidence on reforming registration for Income Tax Self-Assessment (ITSA) to give taxpayers a better understanding of their tax obligations and support available to them.
• Publishing a summary of responses to the Call for Evidence on the Tax Administration Framework Review (TAFR), including plans to reform several areas of the tax administrations system to simplify and modernise it.
• A Call for Evidence on the role umbrella companies play in the labour market to improve our understanding of the sector.
• Publishing the first five-year review of the Office of Tax Simplification (OTS) launched in March 2021 to examine the effectiveness of the OTS.
• A consultation on potential changes to the Stamp Duty Land Tax reliefs for mixed-property and multiple dwellings to ensure they operate fairly and to reduce the scope for misuse.