The CIOT has responded to HMRC’s consultation on timely payment of tax, which seeks views on moving to more frequent calculation and payment based on current year information, saying it remains ‘unconvinced of the overall benefits to taxpayers’.
‘It is our strong view, that a move to tax liabilities based on in-year calculations could only work if the tax system was fundamentally reformed first,’ the institute said. ‘At the moment, calculations based on an up-to-date view of the in-year tax position seem highly aspirational. This is because the UK’s tax system does not work in real time, it works in arrears.
The CIOT warned that, if payment of tax is to be based more in real time, ‘there needs to be a fundamentally different basis of determining tax liabilities in real time’. It recommends:
In terms of general timings, the CIOT welcomes the confirmation that there is no intention to make any significant changes to the timing of income tax or corporation tax payments within the present parliament.
The CIOT has responded to HMRC’s consultation on timely payment of tax, which seeks views on moving to more frequent calculation and payment based on current year information, saying it remains ‘unconvinced of the overall benefits to taxpayers’.
‘It is our strong view, that a move to tax liabilities based on in-year calculations could only work if the tax system was fundamentally reformed first,’ the institute said. ‘At the moment, calculations based on an up-to-date view of the in-year tax position seem highly aspirational. This is because the UK’s tax system does not work in real time, it works in arrears.
The CIOT warned that, if payment of tax is to be based more in real time, ‘there needs to be a fundamentally different basis of determining tax liabilities in real time’. It recommends:
In terms of general timings, the CIOT welcomes the confirmation that there is no intention to make any significant changes to the timing of income tax or corporation tax payments within the present parliament.