The Chartered Institute of Taxation (CIOT) has urged the government to ‘simplify’ its new Structures and Buildings Allowance (SBA).
The SBA provides relief for expenditure on certain new, non-residential structures and buildings. Eligible construction costs incurred on or after 29 October 2018 will qualify for relief: this will be at an annual rate of 2%, on a straight-line basis. If a contract was entered into before this time, relief will not be available.
In a recent report, the CIOT stated that the current SBA rules are ‘too complex’, and that they ‘over-complicate matters for taxpayers’.
According to the CIOT, the SBA ‘creates new categories of expenditure’, which will have to be identified and tracked for tax purposes. The Institute has urged the government to remove ‘much of the detail and complexity’ from the current proposals in order to help eliminate confusion amongst taxpayers.
Commenting on the matter, John Cullinane, Tax Policy Director at the CIOT, said: ‘We urge the government to consider whether a simpler, more streamlined approach to the SBA is possible. The policy aims could have been achieved by a simpler approach of incorporating the relief for this expenditure into the existing capital allowances available.’
The Chartered Institute of Taxation (CIOT) has welcomed the legal status given to the Making Tax Digital for VAT (MTD for VAT) ‘soft landing’ period, which is intended to help taxpayers who may find it difficult to comply with the IT demands associated with the initiative.
The MTD for VAT regulations are set to take effect from 1 April 2019, and will apply to VAT-registered businesses with a taxable turnover above the VAT registration threshold (currently £85,000).
HMRC recently published a VAT Notice which states that the Revenue will allow a ‘soft landing’ period of time for firms to ensure they have ‘digital links between all parts of their functional compatible software’ in place.
However, for the first year of mandation, businesses will not be required to create digital links between MTD for VAT software programs.
Whilst the CIOT welcomed the news, it has warned that the soft landing period will not affect how the final VAT return is filed. This must be submitted through Application Programming Interface (API)-enabled software, rather than HMRC’s current portal.
Commenting on the matter, John Cullinane, CIOT Tax Policy Director, said: ‘Robust systems will need to be implemented by HMRC to ensure that this soft landing is fairly and consistently applied, with the least amount of aggravation for businesses, their agents, and HMRC.’
In a recently published report, the Institute for Fiscal Studies (IFS), the Chartered Institute of Taxation (CIOT) and the Institute for Government (IfG) have called for the government to change the way it makes tax and budget decisions.
The report comes following the 2016 publication of an open letter to Chancellor Philip Hammond, in which the three organisations called for significant changes to be made to the UK’s tax system in order to ‘simplify the making of tax policy’.
It outlines the need to publish ‘clear guiding principles and priorities’ for tax policy, and to improve consultation, ensuring that consultations occur before key decisions are made.
The institutes also called for the implementation of a more robust policy-making process, and for decisions to be challenged before they are incorporated into the Budget speech.
The report did, however, welcome the Chancellor’s announcement to move to a single Budget each year.
Paul Johnson, Director of the IFS, commented: ‘Tax policy is too important to leave to the Chancellor alone. We need a more open policy-making process as a route to a better tax system.
‘The lack of any explicit tax strategy allows policy to be made on the hoof and makes it harder to engage the public in a much needed rational debate about tax.’
07 Aug 2014
The Chartered Institute of Taxation (CIOT) has called for a relaxation of Real Time Information (RTI) requirements, which is being implemented in UK payroll systems.
RTI was introduced for large businesses in 2013 and has been phased in to encompass all UK businesses.
Colin Ben-Nathan, CIOT Employment Taxes Sub-Committee Chairman, said: ‘The competitiveness of a tax system is crucial for businesses and taxpayers who operate within its jurisdiction. Of course part of this is about rates, but survey after survey has found that, for many, administrative burdens are at least as important’.
Citing a recent survey conducted on CIOT members, he added: ‘Over half of the respondents replied that small employers should be allowed to opt out of RI reporting, saying their clients found it too prescriptive, time-consuming, and even unworkable’.
The statement was made in response to a call from the Office of Tax Simplification (OTS) as part of a review of competitiveness of tax administration in the UK.