The Office of Tax Simplification (OTS) has published a note evaluating its work on corporation tax and providing a stock take of its work on the taxation of self-employed people.
Highlights include the following:
In a client briefing, EY observes: ‘Of particular note in relation to corporation tax, the paper suggests that, for the largest companies, stability of the operating environment and the degree of tax certainty that is realistic and proportionate for them to be able to secure may be more important than simplicity. Among its other specific recommendations, the OTS suggests it will particularly encourage the government to continue to consider the potential disproportionate burden in making and reporting small adjustments for UK/UK transfer pricing adjustments and the penalties that can arise even where any adjustments needed are self-cancelling. It will also highlight the scope to remove overlapping or legacy anti-avoidance legislation or provide greater clarity about situations where provisions such as the ‘unallowable purpose’ test would not apply in practice. Finally, the OTS notes that implementing making tax digital (MTD) for corporation tax, which the government has promised to consult on in the autumn, would be more challenging than for VAT, where quarterly and monthly returns are the norm.’
‘In respect of other issues, the OTS is reviewing the short life asset regime and the processes around fixtures elections as part of its claims and election review,’ EY added.
The Office of Tax Simplification (OTS) has published a note evaluating its work on corporation tax and providing a stock take of its work on the taxation of self-employed people.
Highlights include the following:
In a client briefing, EY observes: ‘Of particular note in relation to corporation tax, the paper suggests that, for the largest companies, stability of the operating environment and the degree of tax certainty that is realistic and proportionate for them to be able to secure may be more important than simplicity. Among its other specific recommendations, the OTS suggests it will particularly encourage the government to continue to consider the potential disproportionate burden in making and reporting small adjustments for UK/UK transfer pricing adjustments and the penalties that can arise even where any adjustments needed are self-cancelling. It will also highlight the scope to remove overlapping or legacy anti-avoidance legislation or provide greater clarity about situations where provisions such as the ‘unallowable purpose’ test would not apply in practice. Finally, the OTS notes that implementing making tax digital (MTD) for corporation tax, which the government has promised to consult on in the autumn, would be more challenging than for VAT, where quarterly and monthly returns are the norm.’
‘In respect of other issues, the OTS is reviewing the short life asset regime and the processes around fixtures elections as part of its claims and election review,’ EY added.