Consultations and Summaries of responses to Consultations

As expected HMRC have issued a range of consultation documents and summaries of responses to previous consultations today.  The ones that are most applicable to the HE sector are set-out below. 

New Consultations

If you would like to be involved in responding to any of these documents, please contact Andrea or Julia:

Call for evidence: the tax administration framework: supporting a 21st century tax system

Closing date 13 July 2021.  This considers the “economic and technological change to deliver the flexible, resilient and responsive tax system the UK will need”, focusing on

• Ensuring consistent obligations for people to enter and exit the tax system
• Improving the way tax liabilities are calculated and assessed
• Using data and information to make tax compliance effortless for the majority
• Tax payments and repayments
• Building in effective methods of verification, sanctions and safeguards to promote compliance
  

Call for evidence: timely payment

Closing date 13 July 2021.  This focuses on the payment of Income Tax Self Assessment and Corporation Tax by those outside the quarterly instalment regime.

Notification of uncertain tax treatments by large businesses - second consultation

Closing date 1 June 2021.  This is the second consultation on this issue. You can read BUFDG’s response to the first consultation here. This second consultation is seeking views on:

• the definition of uncertain tax treatment
• the threshold for notification
• exclusions from the requirement to notify
• the proposed penalty for non-compliance

One point to note, though is that the taxes within scope of the requirement  to notify have been reduced to Corporation Tax, Income Tax (including PAYE) and VAT.

Transfer pricing documentation

Closing date 1 June 2021.  This consultation explores potential changes to:

• transfer pricing record keeping requirements for the largest businesses
• the introduction of a new tax filing requirement for all businesses affected by transfer pricing regulations

Summaries of responses to previous consultations

The following summaries relating to previous consultations that are relevant to the HE sector have also been issued:

Call for evidence: simplification of partial exemption and the Capital Goods Scheme

The main points that come out of this are:

• The time taken to agree partial exemption special methods (PESM’s) is excessive
• HMRC’s attitude to PESM’s can make administering them challenging
• Using a PESM without approval was welcomed (subject to certain parameters)
• Turnover based sectors should be used without approval from HMRC
• HMRC staff to be better trained and more commercially aware
• Capital Goods Scheme (CGS) is “burdensome, complex, and results in minimal adjustments”
• An increase in the CGS limit ranging from £1m to £5m

The document sets out the main changes that HMRC are bringing in following this consultation, which are:

• A centralised PESM application point
• Clearer application process (meaning that there will be a form to complete)
• Sectoral frameworks

The report concludes with: In terms of the de minimis and CGS, HMRC will also engage further with stakeholders to better understand the impact of any potential threshold and process changes which could be made in the future.

So we take it from this that there are no immediate plans to change the de minimis limit nor the CGS limit.

Carbon Emissions Tax

A few universities responded to this. Interestingly, the document, does not appear to reach any conclusions about the way forward.