Tax

Gov releases documents to create ‘trusted, simple’ tax system

Also part of the release, the government has announced it will legislate to ‘tighten tax rules’ for second property owners meaning they can only register for business rates if their properties are ‘genuine holiday lets’

The government has recently published a series of more than 30 tax documents and consultations to help strengthen policy making and create a more “trusted, simple and modern” tax system.

The documents, which would have traditionally been published in the Budget, have been released as part of the tax policies and consultations update in a call for evidence on the tax administration framework, to create a tax administration system that is “simpler, easier to navigate, and meets the needs of taxpayers”.

Also part of the release, the government has announced it will legislate to “tighten tax rules” for second property owners meaning they can only register for business rates if their properties are “genuine holiday lets”.

Additionally, the update will also cut inheritance tax “red tape” for more than 200,000 estates every year, reducing the amount of paperwork many families fill out. Furthermore, over 90% of non-tax paying estates each year will no longer have to complete inheritance tax forms when “probate or confirmation” is required from 1 January 2022.

Jesse Norman, financial secretary to the treasury, said: “We are making these announcements in order to increase the transparency, discipline and accessibility of tax policy making. These measures will help us to upgrade and digitise the UK tax system, tackle tax avoidance and fraud, among other things.

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“By grouping them together, we want to give Members of Parliament, tax professionals and other stakeholders a better opportunity to scrutinise them.”

Many of the announcements made today (23 March 2021) form a key part of the government’s wider ten-year plan which was published in July 2020. The plan set out a strategy to improve the “resilience and effectiveness” of the country’s tax administration system over the next decade.

The government stated that it is also seeking views through a call for evidence on how the legislation underpinning HMRC’s administration of the tax system could be updated to make the tax system “easier to deal with” and help make tax more straightforward for taxpayers.

Chris Sanger, chair, tax professionals’ forum and EY tax policy leader, said: “Releasing a suite of forward-looking consultation documents on a single day, the date of which is announced in advance, reinforces the importance that the government rightly places on meaningful engagement with taxpayers on tax matters and will help to ensure that its policy making objectives are met.”

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