The Peterborough Evening Telegraph
Counting the cost of Tax Day
In early March, the Chancellor presented his first Budget since the pandemic spread. Readers will be aware of the measures announced, particularly the increases in Corporation Tax in 2023. However, there was another announcement which had tax advisers, if no one else, on the edge of their seats!
Rishi Sunak had labelled March 23 as “Tax Day”; a day when the Government would announce a number of key consultations and calls for evidence, with a view to achieving continued reform of our tax regime. This article looks at those areas announced which are of relevance to companies.
The Government has confirmed that it remains committed to the delivery of a modern digital tax administration, with the roll out of Making Tax Digital (MTD) currently still expected to be extended to Corporation Tax from 2026.
The Government is examining also the “timely payment” of Corporation Tax payments and moving towards in-year payments for small companies who currently pay Corporation Tax nine months and one day after the accounting period end.
For larger corporates there is already quarterly instalment payments, and “very large” quarterly instalment payments. Clearly there is a desire to modernise our tax system to a fully digital system with a move towards more real time reporting of taxable income profits, coupled with earlier payment of tax on those profits. In future you should expect to be reporting your profits more regularly throughout the year, and earlier payment of tax.
The Government will continue to undertake a review into business rates. A conclusion to this review is expected to conclude in Autumn 2021.
There is to be a consultation examining potential changes to current transfer pricing documentation requirements and assessing whether to require the reporting to HMRC of material cross-border transactions with associated enterprises.
Finally, the Government is consulting on a tax to be payable by large residential property developers, the tax aimed at helping pay for the costs of cladding remediation.
It is expected that the tax will be introduced from 2022 and is in addition to a previously announced levy on new high-rise buildings, both of which were previously announced in February.
The tax/levy applies directly to the developers, rather than the purchasers of the residential properties.
You should consider the impact these Tax Day 2021 announcements may have on your business, seeking advice where necessary.