Tax policy documents (and my thoughts) and Covid-19
HM Treasury and HMRC have set out new timelines for tax policy consultations and other work in the light of the current Covid-19 crisis. As I comment further below, this is welcome news but I would have gone much further…
• There will be a three-month extension to many consultation deadlines to give stakeholders time to submit their views
• The extension will ensure that those facing Covid-19 disruption will have a chance to have their say on possible tax changes
• Despite the extension of publication deadlines, due to Covid-19, the government remains committed to all planned reforms
The government is extending deadlines to ten consultations and calls for evidence currently underway by three months and also a short delay to the publication of other documents announced at Budget 2020.
The extension will give all stakeholders, who are facing disruption due to COVID-19, more time to submit their views and allow them to fully engage with these documents and contribute to the tax policy making process.
The government says it is grateful for responses already received, and would welcome further early responses from stakeholders where possible, to support its continuing consideration of these issues.
The Financial Secretary to the Treasury Jesse Norman said:
“Consulting on tax policy is crucial to good tax law. And a good consultation makes sure everyone with an interest in the subject has an opportunity to have their say.
That is why we are extending these deadlines. The government is very grateful to the stakeholders who have already responded to these documents. But it is also acutely aware that there may be others who want to contribute but cannot do so because of the current situation with Covid-19. This extension should help them to do so.”
Alongside the consultation extensions, the publication of some documents announced at Budget 2020, including work on tax conditionality and a consultation on stronger penalties for tobacco tax evasion, will be pushed back until the Autumn. And the government will set out in due course when it will publish other tax policy documents, including the consultation on aviation taxation and a call for evidence on disguised remuneration schemes.
Is the delay long enough though? It’s claimed that an extra three months should allow sufficient time for engagement, whilst still enabling the government to deliver important tax policy changes within the current fiscal timetable. I disagree. We’ve already had the farce of a Budget, which within days proved to be a complete fiction as the economic rulebook was re-written almost overnight. How can we possibly say with any certainty, within the next three months, what the economic situation will be? Surely it would be far better to simply ditch all the proposed changes and start again from scratch.
We know there will have to be a re-writing of the tax code. It’s obvious. We will all have to pay more taxes. Ways of working will change beyond recognition, as they already have done. That will make current plans for off-payroll working completely redundant. The distinction between earned and unearned income will have to go, as will the discrepancy between capital gains and income.
But that’s for another day and I will be writing more on that over the coming weeks.
For what it’s worth, though, whilst the government continues to try and pretend that fiscal and economic life can go on much as before, here is a full list of the extension announced.
Full List of Extensions
The deadlines for responses to the following tax policy documents will be extended for three months, to allow stakeholders to engage fully with these documents and to contribute to the tax policy making process. However, the government encourages early responses from stakeholders where possible, to support its continuing consideration of these issues:
• Plastic Packaging Tax: Policy Design – now closing on 20 August 2020
• Preventing abuse of the R&D tax relief for SMEs: second consultation – now closing on 28 August 2020
• Tackling Construction Industry Scheme abuse – now closing on 28 August 2020
• Notification of uncertain tax treatment by large businesses – now closing on 27 August 2020
• Vehicle Excise Duty: call for evidence – now closing on 3 September 2020
• Call for evidence: raising standards in the tax market – now closing on 28 August 2020
• Consultation on the taxation impacts arising from the withdrawal of LIBOR – now closing on 28 August 2020
• Hybrid and other mismatches – now closing on 29 August 2020
• Tax treatment of asset holding companies in alternative fund structures – now closing on 19 August 2020
• Consultation: HMRC Charter – now closing on 15 August 2020