The Chartered Institute of Payroll Professionals
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The consultation document outlines an illustrative example of the proposed process as well as their objectives for any solution implemented. These objectives are:
1. a solution must continue to incentivise compliance with the off-payroll working rules and encourage clients to take reasonable care and make correct status determinations from the outset
2. a solution must not result in the client gaining an economic advantage from getting the status determination wrong
3. t he amount to be set against the deemed employer’s PAYE liability must be calculable, either exactly or approximately, using information that is currently available to HMRC or that can be provided by the deemed employer
4. a solution should share the tax burden more equitably between the deemed employer and worker
5. HMRC should not collect more tax and NICs than is necessary to achieve the key principles of the off-payroll working rules
6. a solution should not give rise to obligations and rights that are too difficult to exercise or implement in practice, both for HMRC and taxpayers
7. a solution should minimise the administrative burden of correcting errors for all parties
8. a solution should encourage co-operation between HMRC and taxpayers.
Further exploration is given to: •
the taxes within and outside of scope for the calculations • how HMRC will conduct the calculations • notifications sent and the appeals process • the additional information HMRC will need to effectively process a set-off • compliance and behavioural impacts • penalties • settled compliance checks.
There is a lot to unpack with this consultation and could have future impact on any employer who needs to make status determinations. This consultation closes on 22 June 2023.
Your views will help shape proposals and feed into HMRC’s data gathering. The CIPP will be responding to various consultations released today, as part of the tax administration and maintenance day (TAMD). If you are interested and want to have a say, please keep an eye out for CIPP roundtable and think tank invites which will be sent to full, fellow and Chartered members.
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New consultation: The Tax Administration Framework Review Published: 27 April 2023 Emailed: 3 May 2023
The government has launched a new consultation ‘ The Tax Administration Framework Review: Creating innovative change through new legislative pilots ’. The consultation welcomes views on a proposed legislative approach to piloting. HMRC is exploring how to develop and improve testing prior to wider roll out of change. A call for evidence on the legislative framework underpinning tax administration was broadcasted on 23 March 2021 and the response was released on 30 November 2021. However, respondents expressed views that HMRC could be more transparent in developing policy and take a more collaborative approach to delivering change. Some stakeholders suggested that HMRC look at ‘sandbox testing’ . This is a way used by various organisations already to test and refine new ideas, by piloting them in restricted environments before rolling them out more widely. As part of the Tax Administration Framework Review, this discussion is the next stage exploring how the possible use of a HMRC sandbox piloting model could achieve change more collaboratively. It seeks views on a bespoke piloting and testing approach which focuses on giving HMRC the legislative ability to gather the evidence needed to make informed, innovative policy changes where needed.
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