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inheritance tax, this will have wide-ranging implications for advisers. It makes a significant contribution to the Treasury coffers and if the government does decide to scrap it, it will need some form of replacement to plug the gap. "If the government does decide to scrap inheritance tax, this will have wide- ranging implications for advisers" Tom Adcock from Gravita recently raised the idea on AccountingWEB that maybe it’s time for the government to start thinking about capital gains tax (CGT) as a ready-made replacement for inheritance tax. “CGT is a relatively simple solution that could be adapted for factors such as reliefs, charges on cash and applications to trusts that would make it function as a replacement for IHT,” suggested Adcock on the site. Meanwhile, it’s decision time for the Treasury’s making tax digital income tax self-assessment (MTD ITSA) small business review. Following the two-year delay of MTD ITSA to April 2026, the Treasury spent the first part of the year speaking to stakeholders about the next steps of the digital project and how to adapt the requirements of MTD ITSA to make it more accessible for smaller businesses. One accountancy body has already made its thoughts clear as part of this review in a punchy letter to HM Revenue and Customs (HMRC) where it called for the tax department to drop quarterly reporting. Whatever the Treasury decides, the small business review may end up with recommendations which have a ripple effect throughout the MTD project. So, could the Treasury release the results of the review at the autumn statement? A safe bet for the autumn statement is an update on the research and development (R&D) tax relief, considering it’s made frequent appearances in recent fiscal statements. Earlier this summer, the government published draft legislation for the merger of the large and small company R&D schemes. These changes
are highly likely to come into play on 1 April 2024. Further R&D tinkering comes, as HMRC has stepped up its crackdown on the abuse of R&D tax relief claims. But this has caused tax bodies to raise concern that valid claims are being rejected, and businesses that do challenge HMRC ‘meet a brick wall’ and give up on their claims. No hopes? As the autumn statement approaches, there’s likely to be a groundswell of calls for further investment in HMRC services. This comes after HMRC helpline wait times regularly exceed 45 minutes and the tax department has attempted to manage capacity demands by closing the self-assessment helpline over the summer and removing the 10-minute service call answering target on the agent dedicated line. However, the chancellor lowered expectations for further investment at the recent conservative party conference in October by announcing an immediate cap on civil servant headcount. The chancellor and the prime minister are also feeling pressure from conservative backbenchers (and a 45-day prime minister) to cut taxes. The government attempted to curb these calls by saying it also wants to cut taxes – just not yet. Rishi Sunak promised tax cuts will come once inflation reduces, saying at the conservative conference that “the best tax cut we can give people right now is to halve inflation”. This means those waiting for tax cuts will have to wait for the spring budget, which will conveniently be closer to the general election. So, it’s likely then that the chancellor will let the rabbits hibernate for the winter and will wait until the spring budget to pull as many out the hat as possible. But with approval ratings still trailing the opposition, we’ll have to wait until 22 November to see if the government wants to keep at least one rabbit back for the autumn. n The Festival of Accounting and Bookkeeping is coming to the NEC on 12-13 March. It’s going to be different from any accounting event you’ve attended before. Go to FAB.UK to get the latest information.
This course is ideal for individuals managing a global payroll office or those about to move into this area.
Visit cipp.org.uk/training to book your place
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| Professional in Payroll, Pensions and Reward |
Issue 95 | November 2022
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