Policy hub
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Policy team update
The CIPP policy team provide an update
Making Tax Digital forum The Making Tax Digital (MTD) project is set to change the face of tax administration as we know it, or so it appears to be aspiring to. And so (and in advance of the publication of government response to the six MTD consultation papers) the Making Tax Digital Forum began its 2017 programme of events. The first meeting was attended by a cross-sector of representatives, who in their various roles speak on behalf of all affected stakeholders in the MTD transformation: small business, large employers, professional bodies, employees, low-paid taxpayers and pensioners. Samantha Mann attended this meeting to establish how we could feed-in to a transformation that promises to be hitting the headlines for some time to come with its ambitious targets and timetables. ...how RTI data would be used in a far wider-ranging way... The introduction or real time information (RTI) back in 2013 came with a fanfare of the benefits to the universal credit process, and so publicity at the time focussed on the ultimate benefits to those in receipt of work-related benefits. Also mentioned, but possibly not emphasised with as much vigour at the time, was how RTI data would be used in a far wider- ranging way – and we have already begun to see its impact simply on new policy development, a prime example being the apprenticeship levy. But on a smaller, less invasive and more relevant scale is the fact that from
2017–18 HM Revenue & Customs (HMRC) will be using real time data to assess, in year, whether an individual will be likely to end the tax year owing tax. Much press time is spent each year, criticising how ineffective the pay as you earn (PAYE) system is and most certainly there are elements that can, and should be, tweaked and improved. However, the PAYE system works for the vast majority of the 43,000,000 taxpayers (employees and those in receipt of pension) leaving about 7,000,000 who due to their slightly more complex affairs will end the tax year with a balance to pay. It is how PAYE was designed to work, and back in 1944 it worked very effectively for a large percentage of taxpayers caught by it. Simply put, an underpayment of tax that remains owing at the end of the tax year can either be coded out – by way of an adjustment to the following year tax code – or be paid in full. From April 2017, HMRC will be looking to the data that has been submitted using RTI full payment submissions (FPSs) by employers and pension companies and assessing during the tax year whether a customer looks to be on-target to owe a balance at the close of the tax year. Where this happens, HMRC will amend the taxpayer’s tax code to make collection before and not after it arises. More will follow from this forum and from the consultation responses, which
at the time of writing, have not yet been published.
No meeting with ‘digital’ in the title is going to pass without mention of the personal tax account (PTA) and that over 7,000,000 customers have already accessed their PTA. The clear message is that MTD will work better if an individual engages with their PTA sooner rather than later. Are you promoting the PTA within your organisation? Optional remuneration arrangements During December 2016, a significant number of publications appeared on GOV. UK amongst which was the summary of responses to the consultation on salary sacrifice for the provision of benefits in kind (http://bit.ly/2khVtYX). HMRC produced a briefing sheet (http://bit.ly/2jQHnOu) to highlight how the treatment of items provided under a salary sacrifice arrangement would be changing. Included in the briefing sheet was the following: “If you provide benefits to your employees in exchange for salary sacrifice/salary exchange or have a flexible benefits package where your employee can choose a benefit or cash, or where you provide benefits but offer your employee a cash alternative then you will be affected/need to know about these changes.” We have italicised text in
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Issue 28 | March 2017
| Professional in Payroll, Pensions and Reward |
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