`The Chartered Institute of Payroll Professionals
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Similar to the AA, the LTA impact to the Treasury is uncertain as this will likely cause a shift in pension savings behaviours, estimated at £135 million in 2023 / 24.
These measures are broadly to encourage participation of over 50’s in the labour market without being hit with a tax bill when contributing further to a pension. With highly skilled workers hitting the allowance and voluntarily withdrawing from active engagement in work, this reduces tax revenues and potentially limits growth. With NHS doctors and consultants being a demographic affected, it is clear that retaining key workers is the main aim.
With these changes it may be more beneficial for workers to contribute more and salary sacrifice for higher earners will become even more beneficial.
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Spring Budget 23: tackling the tax gap Published: 15 March 2023 Emailed: 22 March 2023
The government is constantly striving to address and tackle the ‘tax gap’. The ‘tax gap’ is defined by HM Revenue and Customs (HMRC) as ‘the difference between the actual tax collected and the tax that should have been collected’. The Spring Budget’s accompanying document confirmed a range of measures which will be introduced to reduce the ‘tax gap’. An additional £47.2 million will be invested in helping HMRC to manage tax debts. This will enable HMRC to easily identify those taxpayers who are able to pay their tax debts but actively avoid doing so, but also to recognise those who may be temporarily unable to pay, to ensure they’re provided with the appropriate support. A range of consultations and calls for evidence are due to be released (on Tax Administration and Maintenance Day), one of which will explore the potential introduction of a new criminal offence for promoters of tax avoidance. This will impact those who haven’t complied with a notice from HMRC to stop promoting a tax avoidance scheme. The government will also consult on speeding up the process of disqualifying directors of companies who are involved in promoting tax avoidance.
As tax fraud is recognised as a large contributor to the ‘tax gap’, the maximum sentences for the worst cases of tax fraud will be doubled from the current seven years to 14 years.
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Spring Budget 23: tax simplification Published: 15 March 2023 Emailed: 22 March 2023
With the Office for Tax Simplification (OTS) being wound down as a result of the Autumn Statement in late 2022, HMRC and the Treasury now have a responsibility to incorporate into their standard practices.
HMRC is dedicating time to a systematic review of tax guidance and forms for small businesses over the next 24 months. Government will review guidance to ensure it is clear, simple and easy to understand, helping small businesses as they grow and improving the customer experience. This was an area highlighted at the last stakeholder engagement event help by HMRC which the CIPP attended. One participant stated to a HMRC director “Small businesses are not big businesses only small”, making a point that some guidance and assistance provided is pitched at a level not easily digestible for small business, especially those without large accounts and payroll departments. Tax agents will be given the ability to register for payrolling benefits on behalf of their clients. This is cited to “reduce burdens on empl oyers and enable agents to support their clients more effectively” . Details on how this process will work and effective dates are currently unavailable. We will release more information as it is made available. There is also an announcement of a tax administration and maintenance day coming later in the spring. This will bring further consultations, calls for evidence and announcements relating to the tax system. With no definitive date we will keep a close eye on this as there is usually something worthy of payroll professionals scrutiny.
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