Chris Sanger

Despite the news from the Chancellor that the Autumn Budget has been postponed this year, it has not prevented HM Treasury from issuing today an Autumn set of tax announcements, to add to the series of COVID-19 support and stimulus mini-Budgets since March.

Following today’s ministerial statement from Jesse Norman, Financial Secretary to the Treasury, it is clear that the business of government carries on, even through a global pandemic, with several important tax policy announcements, including the publication of draft legislation and new consultations.

Among the key announcements made today were:

• A one-year extension of the Annual Investment Allowance at a limit of £1m per annum, which would otherwise have reverted to £200,000 per annum from 1 January.

The AIA is somewhat of a “yo-yo” allowance, given how often it is increased and reduced, with each change intended to accelerate investment. Today’s announcement will ensure that more investment can qualify and also that those investments which might not have made the year-end deadline, perhaps due to COVID or indeed Brexit constraints, will qualify, increasing the likelihood of them going ahead. This will be particularly helpful for UK manufacturing at a time when, thanks to the announcement of a vaccine, business confidence is returning.

• A one-year delay of the implementation of a new requirement for large businesses to notify HMRC of uncertain tax treatments until April 2022.

This is welcome as it was apparent from the recent consultation that there are difficulties in getting the policy and legislation crafted to avoid overwhelming taxpayers with the new requirements or drowning HMRC in a blizzard of paperwork. Further engagement with stakeholders may help sharpen the focus of the proposal so that HMRC receives only the information it needs.

• Draft legislation for technical consultation to take forward announced measures on introducing a plastics packaging tax, tackling Construction Industry Scheme abuse, and putting in place the R&D SME scheme tax credit PAYE cap.

This legislation is accompanied by summary responses to the points made during consultation. There is also more technical draft legislation addressing the withdrawal of LIBOR and clarifying parts of the ‘hybrids’ tax regime so that it operates as intended.

• A new consultation on ‘Making Tax Digital’ for corporation tax.

This was part of the tax administration strategy that was published in the summer. It is good to see the Government taking forward its digital plans but we are concerned that, against a background of COVID-19 and Brexit, this consultation may struggle to find engagement with stakeholders who will make direct use of the new system. There are many elements to this move and the consultation also included the idea of bringing forward the deadline for the filing of tax returns.

• Confirmation that a change to the off-payroll working rules will be made in the next Finance Bill to correct an unintended widening of the definition of an intermediary, which went beyond the intended scope of the policy.

HMRC had already issued a statement clarifying the position but it is good to see a commitment to legislation to put the matter beyond doubt.

The next steps the Government is taking on raising standards in the market for tax advice, and tackling promotors of tax avoidance as well as a number of policy announcements for Tobacco and Vehicle Excise duties of the type that would normally be covered in a Budget or other fiscal event.

While many aspects of normal life are currently on hold, today’s announcement suggests that the Government views pushing ahead with refining and improving the tax policy landscape as an important part of preparation for when the country emerges from the grips of the pandemic.

Under normal circumstances, with only a few weeks to go until the end of the year and an Autumn Budget under their belt, the Treasury would perhaps have held off from issuing any significant external announcements. However, in the current climate, with uncertainty the byword defining the last eight months, we shouldn’t rule out further fiscal announcements designed to guide the UK on its path to future recovery.