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Lora Murphy ACIPP, editor, the CIPP, provides details of the spring budget, delivered by chancellor of the Exchequer, Jeremy Hunt, on 15 March
This could have interesting interactions with payroll though, for example, with the apprenticeship levy, so watch this space and we’ll provide further information as soon as we have it. Tax simplification Now the Office for Tax Simplification has been wound down, the remit for the simplification of tax now sits with HM Revenue and Customs (HMRC) and the Treasury. It was pleasing, therefore, to see a whole section of the budget documentation allocated to measures to aid the simplification of the tax system. HMRC will review tax guidance and forms for small businesses over the next two years, in recognition of the fact that smaller businesses often operate in a different fashion to larger organisations. The government will ensure guidance is clear, simple and easy to understand, and will enable smaller businesses to grow. As HMRC increasingly indicates its preference for payrolling of benefits as the method organisations use to report their benefits in kind, it’s been confirmed that tax agents will be able to register for payrolling benefits on behalf of their clients. Currently, a tax agent cannot do this. This is a substantial announcement for outsourced payroll providers, and as soon as more information is provided, we will, of course, update you. Excitingly, a tax administration and maintenance day has been announced. The exact date is unknown, but we do know that it will be held on a date in the spring. This will see the release of multiple consultations and calls for evidence based on the tax system. The CIPP’s policy team will be submitting formal responses to some of these documents, and will be calling on you, the professionals, to use your voice and inform the content of those responses.
the maximum sentences for the most egregious cases of tax fraud will be doubled, from the current seven years to 14 years. We’ve also been made aware that the government will consult on the introduction of a new criminal offence for promoters of tax avoidance, who haven’t complied with a notice from HMRC to stop promoting a tax avoidance scheme. The government will also explore how to expedite the process of disqualifying directors of companies involved in the promotion of tax avoidance. Other areas of interest Although this doesn’t impact payroll directly, I’m sure there are individuals reading this who must juggle work and childcare. A huge announcement on budget day was that free childcare would be made available for children from the age of nine months and above, rolled out in stages from 2024. This will make it easier for individuals with small children to enter back into the workforce earlier. Additionally, the government will introduce a national pathfinder scheme for wraparound childcare in England, with the aim of ensuring all children can access childcare in their local area between 8am and 6pm, again, allowing working parents more flexibility to carry out their jobs. Hopefully the spring budget has brought with it a feeling of calm and relief for payroll professionals. There aren’t many announcements which will impact on the industry, this is hugely welcome following a few extremely turbulent years for the profession. As always, as more detail surrounding budget announcements becomes available, we’ll keep you updated, whether that be through the magazine, News Online or through policy events . n
Ahead of tax administration and maintenance day, we’ve already seen the launch of a consultation which considers how HMRC can ‘simplify and modernise’ the income tax system. This explores the possibility of moving to a ‘digital by default’ approach, which will mean technology is further integrated into the tax administration framework. It also seeks feedback on: l improving the pay as you earn process l a review of the self-assessment criteria. Tackling the tax gap The tax gap is the difference between tax which should have been collected and the actual amount of tax collected during a tax year. Understandably, this is an area the government and HMRC is constantly focussing on. As with tax simplification, how to tackle the tax gap had its own dedicated area within the budget document. “An extra £47.2 million will be provided to help
HMRC in the management of tax debts”
An extra £47.2 million will be provided to help HMRC in the management of tax debts. This will allow HMRC to distinguish between those who can pay their tax debts but actively avoid doing so and those who are genuinely temporarily unable to pay. This means HMRC can appropriately tailor its approach to these individuals, providing support where required. Tax fraud undoubtedly increases the tax gap each year. In recognition of this,
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| Professional in Payroll, Pensions and Reward |
Issue 89 | April 2023
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