Spring Budget tax consultations and calls for evidence – send us your views
By Susan Cattell, Head of Tax Technical Policy
22 March 2023
Susan Cattell outlines the tax consultations, calls for evidence and discussion documents published, or announced, on Spring Budget day 2023, and invites your views to inform our responses.
The Budget and Finance Bill timetable
The Chancellor presented his Spring Budget on 15 March, and the Spring Finance Bill 2023 is due to be published on 23 March. We are also expecting a Tax Administration and Maintenance Day later in the spring.
The timing of fiscal events and tax legislation has been subject to some fluctuation in the last few years. ICAS supports the principles set out in the 2017 policy paper ‘The new Budget timetable and the tax policy making process’. These were designed to increase predictability, stability and simplicity in the UK tax system and to address concerns that tax policy making was often piecemeal and reactive. We would like to see the government presenting a single Autumn Budget, with the associated timetable for consultations, draft legislation and the Finance Bill. This would also be helpful to support the devolved nations in making effective tax policy.
Tax consultations, calls for evidence and discussion papers
ICAS will be responding to the key tax consultations published on Spring Budget day, or issued subsequently. We welcome members’ views to inform our responses, by email to tax@icas.com.
Published on Budget day:
Expanding the cash basis
This consultation on expanding the income tax cash basis for self-employed businesses closes on 7 June. The intention behind the proposals is to increase both the number of businesses that are eligible to use the cash basis and the use of the simpler regime within the eligible population.
Views are invited on the cash basis generally and on four specific proposals:
- Increasing the turnover thresholds for businesses to use the cash basis
- Setting the cash basis as the default, with an opt-out for accruals
- Increasing the £500 limit on interest deductions in the cash basis
- Relaxing restrictions on using relief for losses made in the cash basis
Simplifying and modernising HMRC's income tax services through the tax administration framework
This discussion paper sets out plans to modernise income tax services, focusing on the PAYE and income tax self assessment regime. Views are invited, by 7 June, on plans for HMRC to move to a 'digital by default' approach for some of its outputs, improvements to PAYE and a review of the income tax self assessment criteria.
Taxation of environmental land management and ecosystem service markets
This consultation and call for evidence runs until 9 June and considers elements of the tax treatment of ecosystem service markets and environmental land management. It is split into two parts:
- Part 1: a call for evidence on the tax treatment of the production and sale of ecosystem service units. The aim is to understand the commercial operations and the areas of tax uncertainty.
- Part 2: a consultation about the scope of IHT agricultural property relief (APR). The aim is to explore the extent to which the current scope of APR may represent a barrier and, if necessary, potential updates to the scope of the existing land habitat provisions in the relief. It also looks in more detail at a recommendation in the recent Rock Review of tenant farming in England to restrict the application of 100 per cent agricultural property relief to longer tenancies of eight or more years.
VAT energy saving materials relief – improving energy efficiency and reducing carbon emissions
This call for evidence on expanding the VAT energy saving materials relief seeks input by 31 May on two possible areas of reform:
- Inclusion of additional technologies; and
- Extension of the relief to installations of energy saving materials in buildings intended solely for a relevant charitable purpose.
Announced on Budget day, but not yet published:
Tackling promoters of tax avoidance
The government intends to consult ‘shortly’ on the introduction of a new criminal offence for promoters of tax avoidance, who fail to comply with a legal notice from HMRC to stop promoting a tax avoidance scheme. There will also be a consultation on expediting the disqualification of company directors involved in promoting tax avoidance.
Call for evidence on informal flexible working
There will be a call for evidence in summer 2023 on informal and ad hoc flexible working, with the aim of obtaining a better understanding of informal agreements on flexible working between employees and employers. It is not clear whether this will consider tax issues.
Occupational health provision
There will be a consultation on options for incentivising greater take up of occupational health provision through the tax system.
Non-discretionary tax advantaged share schemes
There will be a call for evidence on the Share Incentive Plan and Save As You Earn employee share schemes. The intention is to consider opportunities to improve and simplify the schemes.
Standards in the tax advice market
A consultation on options for possible regulation of the tax advice market and a definition of tax advice was expected to be published in 2022. This did not appear on Budget day and it is unclear whether, or when, it might be issued.
Let us know your views
We welcome members’ input on consultations or other tax-related matters – email tax@icas.com to share your insights and feedback. ICAS responds to many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which service levels, delays and other issues are discussed, and we raise problems being encountered by members.
