Tax Administration

Tax Administration

 

Tax avoidance

No Budget would be complete without an announcement of a crackdown on tax avoidance and evasion. This time, there seemed to be no specific schemes for the Chancellor to close – instead, he announced a range of measures to make life difficult for people who promote and ‘enable’ artificial tax avoidance schemes. There is also extra funding for HMRC to pursue tax avoidance.

Loan charge

The Budget confirmed that the Government will implement the recommendations of Sir Amyas Morse’s review of the ‘disguised remuneration loan charge’. This was intended to negate the benefit of tax avoidance arrangements going back to 1999. The effect on some individuals was severe, and many argued that it was unfair to tax twenty years’ worth of income in one year when HMRC had known about the scheme for years without challenging it. The charge will only apply to loans made from 9 December 2010 to 5 April 2019, and a number of other concessions will help those affected to settle their bills. Anyone who is concerned that the rules might apply to them should take advice on what ought to be a better outcome.

Insolvency

In 2018 the Government announced an intention to move HMRC up the order of preference when a business enters insolvency. This is intended to make sure that taxes that a business has deducted from someone else – PAYE, NIC and student loan deductions from employees and VAT from customers, for example – are used to pay for public services rather than going to other creditors. This measure will now be introduced (and will be extended to include Northern Ireland) but will be delayed to 1 December 2020.

The human face of HMRC

Tax law often refers to a decision being made ‘by an officer’. Some taxpayers have challenged notices that have been issued automatically by HMRC’s computer on the basis that no human decision was involved. The law will be changed, with retrospective effect, to make sure that all notices issued by computer have their intended legal effect.