Tax body calls for fundamental review of how the UK should tax gains on immovable property owned by non-residents
The proposed cap on income tax reliefs is ‘potentially crippling’ and needs to be fundamentally re-thought, the ICAEW Tax Faculty warned in a briefing sent to David Gauke, the exchequer secretary to the Treasury, earlier this month.
The Faculty published the briefing on its website yesterday. It called for the general anti-abuse rule (GAAR) to exclude inheritance tax pending further consultation, and said the GAAR should be ‘road-tested’ to ensure that it is effective at blocking abusive schemes.
HMRC should continue to work with professional bodies ‘to produce practical and workable guidance so that taxpayers engaged in tax planning in the “middle ground” … have reasonable certainty that the GAAR will not apply’, it said.
Real time information and universal credit
‘We are concerned about the compliance burden and the difficulties that RTI will impose on employers, especially SMEs and non-business employers,’ the Faculty said. ‘In particular, the “on or before” payment rule for RTI submissions will cause major problems and should be aligned with the date by which employers have to account to HMRC for PAYE. Inadequate consideration has been given to the digitally excluded and special provisions should be made for them. Finally, the proposed penalty regime is too draconian and needs to be reconsidered.’
The Federation of Small Businesses said yesterday that a ‘snap poll’ of 1,700 small firms found that only 16% of respondents were fully aware of the RTI programme. ‘Shockingly, a quarter had never heard of it, despite it being critical to the success of universal credit,’ the FSB added in a press release.
John Walker, FSB national chairman, said: ‘With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are aware that it is just around the corner. This system is linked to the government's flagship universal credit scheme and we're concerned that it could flop if government does not step up its game in communicating the changes.’
The Tax Faculty told Gauke that it was concerned about the ‘considerable burden’ that will be imposed on smaller businesses if they are to claim universal credit: ‘Self-employed income must be reported online, every month, using a cash receipts and payments basis which is different from the cash accounting regime being considered by HMRC.’
Residential property
The Faculty’s briefing listed a number of concerns regarding reforms to ensure ‘fair taxation of residential property’ and suggested that the CGT proposals were ‘unworkable’.
It added: ‘There should be a fundamental review of how the UK should tax gains on immovable property owned by non-residents. This would be a radical move which would require further detailed consultation. The government should work up a consultation document exploring options for change which should be underpinned by a rigorous economic impact assessment. Transitional rules will also be needed to preserve taxpayers’ legitimate expectations.’
Tax body calls for fundamental review of how the UK should tax gains on immovable property owned by non-residents
The proposed cap on income tax reliefs is ‘potentially crippling’ and needs to be fundamentally re-thought, the ICAEW Tax Faculty warned in a briefing sent to David Gauke, the exchequer secretary to the Treasury, earlier this month.
The Faculty published the briefing on its website yesterday. It called for the general anti-abuse rule (GAAR) to exclude inheritance tax pending further consultation, and said the GAAR should be ‘road-tested’ to ensure that it is effective at blocking abusive schemes.
HMRC should continue to work with professional bodies ‘to produce practical and workable guidance so that taxpayers engaged in tax planning in the “middle ground” … have reasonable certainty that the GAAR will not apply’, it said.
Real time information and universal credit
‘We are concerned about the compliance burden and the difficulties that RTI will impose on employers, especially SMEs and non-business employers,’ the Faculty said. ‘In particular, the “on or before” payment rule for RTI submissions will cause major problems and should be aligned with the date by which employers have to account to HMRC for PAYE. Inadequate consideration has been given to the digitally excluded and special provisions should be made for them. Finally, the proposed penalty regime is too draconian and needs to be reconsidered.’
The Federation of Small Businesses said yesterday that a ‘snap poll’ of 1,700 small firms found that only 16% of respondents were fully aware of the RTI programme. ‘Shockingly, a quarter had never heard of it, despite it being critical to the success of universal credit,’ the FSB added in a press release.
John Walker, FSB national chairman, said: ‘With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are aware that it is just around the corner. This system is linked to the government's flagship universal credit scheme and we're concerned that it could flop if government does not step up its game in communicating the changes.’
The Tax Faculty told Gauke that it was concerned about the ‘considerable burden’ that will be imposed on smaller businesses if they are to claim universal credit: ‘Self-employed income must be reported online, every month, using a cash receipts and payments basis which is different from the cash accounting regime being considered by HMRC.’
Residential property
The Faculty’s briefing listed a number of concerns regarding reforms to ensure ‘fair taxation of residential property’ and suggested that the CGT proposals were ‘unworkable’.
It added: ‘There should be a fundamental review of how the UK should tax gains on immovable property owned by non-residents. This would be a radical move which would require further detailed consultation. The government should work up a consultation document exploring options for change which should be underpinned by a rigorous economic impact assessment. Transitional rules will also be needed to preserve taxpayers’ legitimate expectations.’
