Opinion Former Article

Tax Institute welcomes delay of off-payroll working rules, but asks the government to go further

The Chartered Institute of Taxation (CIOT) welcomes last night’s announcement that the controversial ‘off-payroll’ rules will be deferred until April 2021, but on the eve of publication of the Finance Bill urges the government to defer other April 2020 changes, too.

John Cullinane, CIOT Tax Policy Director, said:

“We welcome the announcement last night that the reforms to the off-payroll working rules will be delayed from 6 April 2020 to 6 April 2021. We are currently in extraordinary times and many individuals, businesses and employers are already facing significant challenges simply being able to work or to pay the people they employ. These new rules had the potential to significantly impact the labour market, and their deferral is welcome.”

In the light of the COVID-19 pandemic, the CIOT is encouraging the government to look critically at other measures scheduled to take place from next month, with a view to avoiding creating unnecessary burdens during a time of crisis.

John Cullinane added:

“There are a number of other measures due to commence in April 2020 which, when considered in the light of our current situation, should really be delayed.

“For example, the Finance Bill is expected to contain measures limiting the availability of Private Residence Relief, including reducing the final period exemption from eighteen to nine months. The property market is likely to slow down significantly in the coming months and properties may take much longer to sell than expected, leaving some vendors with an unexpected tax bill. It would be sensible to defer this measure until 2021.

“Also, the new 30 day Capital Gains Tax reporting and payment obligations go live on 6 April. As this measure requires an entirely new reporting system, which is not expected to be fully operational by 6 April and has inadequate provision for the digitally challenged or excluded, it would be sensible to defer this until 2021 as well. Given the slower property market it would be unlikely to bring in the expected revenue this year in any case.

“We would encourage the government to look critically at the Finance Bill, and those measures in previous Finance Acts which take effect next month, and defer those which are not absolutely vital. It will also ensure that any remaining measures stand a fighting chance of receiving proper scrutiny.”

The CIOT is also urging the government, and HMRC, to consider practical steps they can take to help businesses and individuals comply with their tax obligations during this challenging period.

John Cullinane added:

“The measures announced at the Budget, and subsequently, to help businesses and individuals survive the pandemic are extremely welcome. Practical support and guidance is also needed, from simple things like missed deadlines and correspondence because offices are closed, to more complex matters around residence status and exceptional circumstances. We are ready, willing and able to help on these issues.”

Notes for editors

 

The Chartered Institute of Taxation (CIOT)

 

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

 

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

 

The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: CIOT External Relations 0207 340 2702 / HVerma@ciot.org.uk

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