The CIOT has responded to the general consultation on the following proposals which were included in the July 2023 ‘Legislation Day’ Finance Bill drafts:
Single, merged scheme for R&D, and additional relief for R&D-intensive SMEs: implementation of the merged scheme should be put back from the proposed 1 April 2024 start date, to allow time for further consultation on the detail and avoid creating unnecessary uncertainty. The R&D-intensive SME scheme should be incorporated into the single scheme, to avoid over-complexity (and avoid two schemes continuing to exist). Further work is required on the treatment of contracted-out R&D.
New criminal offence of failing to comply with a stop notice: the proposal to introduce a strict liability offence appears to cross a constitutional line, with the decision to issue a stop notice resting entirely with HMRC and without external oversight. One safeguard would be to require judicial approval before HMRC issues a stop notice.
Additional information reporting requirements: HMRC should publish in draft the regulations which will set out the detail before the enabling legislation in the Finance Bill is enacted. Implementation of new information requirements from the start of 2025/26 does not afford businesses sufficient time to prepare. The ATT had also raised concerns around the drafting of the legislation.
Abolishing the pensions lifetime allowance: various lump sum death benefits should be tested against the new limit (set at the rate of the LTA) but only for pensions initiated after 5 April 2024 (before that date, benefits would already have been tested against the LTA). The limit should be rounded up and reviewed or indexed periodically in the future. Implementation should be delayed until 6 April 2025 to make sure guidance is in place and administrators have time to understand and implement the changes.
The full collection of draft legislation is available here. Consultation closed on 12 September 2023.
The CIOT has responded to the general consultation on the following proposals which were included in the July 2023 ‘Legislation Day’ Finance Bill drafts:
Single, merged scheme for R&D, and additional relief for R&D-intensive SMEs: implementation of the merged scheme should be put back from the proposed 1 April 2024 start date, to allow time for further consultation on the detail and avoid creating unnecessary uncertainty. The R&D-intensive SME scheme should be incorporated into the single scheme, to avoid over-complexity (and avoid two schemes continuing to exist). Further work is required on the treatment of contracted-out R&D.
New criminal offence of failing to comply with a stop notice: the proposal to introduce a strict liability offence appears to cross a constitutional line, with the decision to issue a stop notice resting entirely with HMRC and without external oversight. One safeguard would be to require judicial approval before HMRC issues a stop notice.
Additional information reporting requirements: HMRC should publish in draft the regulations which will set out the detail before the enabling legislation in the Finance Bill is enacted. Implementation of new information requirements from the start of 2025/26 does not afford businesses sufficient time to prepare. The ATT had also raised concerns around the drafting of the legislation.
Abolishing the pensions lifetime allowance: various lump sum death benefits should be tested against the new limit (set at the rate of the LTA) but only for pensions initiated after 5 April 2024 (before that date, benefits would already have been tested against the LTA). The limit should be rounded up and reviewed or indexed periodically in the future. Implementation should be delayed until 6 April 2025 to make sure guidance is in place and administrators have time to understand and implement the changes.
The full collection of draft legislation is available here. Consultation closed on 12 September 2023.
