Written statement on Update on tax policy documents - Apr 28

Jesse Norman (The Financial Secretary to the Treasury): At Budget 2020, the Government published eleven tax policy consultations and calls for evidence. The Government is grateful for the responses to these that have already been received from stakeholders.

The Government recognises that many stakeholders are facing significant disruption due to COVID-19. The Government wants to give all stakeholders time to submit their views.

Therefore, the deadlines for responses to the following tax policy documents will be extended for three months, to allow stakeholders to engage fully with these documents and to contribute to the tax policy making process. However, the Government encourages early responses from stakeholders where possible, to support its continuing consideration of these issues:

• Plastic Packaging Tax: Policy Design – now closing on 20 August 2020
• Preventing abuse of the R&D tax relief for SMEs: second consultation – now closing on 28 August 2020
• Tackling Construction Industry Scheme abuse – now closing on 28 August 2020
• Notification of uncertain tax treatment by large businesses – now closing on 27 August 2020
• Vehicle Excise Duty: call for evidence – now closing on 3 September 2020
• Call for evidence: raising standards in the tax market – now closing on 28 August 2020
• Consultation on the taxation impacts arising from the withdrawal of LIBOR – now closing on 28 August 2020
• Hybrid and other mismatches – now closing on 29 August 2020
• Tax treatment of asset holding companies in alternative fund structures – now closing on 19 August 2020
• Consultation: HMRC Charter – now closing on 15 August 2020

The EU exit transition period will end on 31 December 2020. The consultation on duty-free and tax-free goods carried by passengers and the informal consultation on the VAT treatment of overseas goods will therefore continue to the existing timetable. This will provide businesses with clarity as early as possible on the policies that will apply from 1 January 2021. It will also give businesses enough time to prepare and ensure the right legislation is in place for 1 January 2021. The Government appreciates that some stakeholders may not be able to respond by the deadline, and where late submissions are received, it will take them into account as far as possible.

On 16 April the Government published a consultation on the Climate Change Agreement scheme extension and reforms for any future scheme. The timetable for this will continue as planned, to ensure the extension of the scheme will be in place by September as announced at Budget 2020, supporting energy intensive businesses to operate in a more environmentally sustainable way.

At Budget 2020, the Government also announced it would publish a number of other tax policy documents. In the light of COVID-19, the Government will consider the publication of these and other expected documents on a case by case basis, taking into account the impact of COVID-19 on stakeholders. The Government will continue to publish the following documents over the Spring and Summer:

• The call for evidence for the fundamental review of Business Rates
• The consultation on further entitlement to use Red Diesel
• The consultation on the design of a carbon emissions tax
• The consultation on National Insurance Contributions holiday for employers of veterans
• A call for evidence as part of the post-EU exit alcohol review
• A summary of responses to the call for evidence on the operation of Insurance Premium Tax
• A summary of responses and government next steps to the Aggregates Levy Review
• HMRC’s Civil information powers
• A summary of responses to the non-UK resident SDLT surcharge consultation
• A summary of responses to the call for evidence on VAT electronic sales suppression
• A review of how VAT works in the public sector

The Government will delay the publication of the following documents until the Autumn:

• A discussion document on the wider application of tax conditionality
• The response to the call for Evidence on simplification of the VAT partial exemption and capital goods schemes
• The consultation on whether qualifying R&D tax credit costs should include investments in data and cloud computing
• The consultation on stronger penalties for tobacco tax evasion

The Government will provide more detail on the publication of the following documents in due course:

• The consultation on aviation tax reform
• The call for evidence on disguised remuneration schemes
• The review of the UK funds regime
• The consultation on the Economic Crime Levy
• The conclusion of the Small Brewers’ Relief Review
• A summary of responses to the call for evidence on Social Investment tax relief

The Government’s position on publication of tax policy documents will be kept updated through the public consultations tracker.

PRESS NOTICE

• three month extension to many consultation deadlines to give stakeholders time to submit their views
• extension will ensure those facing Covid-19 disruption will have a chance to have their say on possible tax changes
• despite the extension of publication deadlines, due to Covid-19, the government remains committed to all planned reforms

HMT and HMRC are today setting out new timelines for tax policy consultations and other work in the light of the current Covid-19 crisis.

The government is extending deadlines to ten consultations and calls for evidence currently underway by three months – including the Plastic Packaging Tax, a call for evidence on Vehicle Excise Duty and a consultation on the HMRC Charter – and also a short delay to the publication of other documents announced at Budget 2020.

The extension will give all stakeholders, who are facing disruption due to COVID-19, more time to submit their views and allow them to fully engage with these documents and contribute to the tax policy making process.

The government is grateful for responses already received, and would welcome further early responses from stakeholders where possible, to support its continuing consideration of these issues.

Consultations on duty-free and tax-free goods carried by passengers and on the VAT treatment of overseas goods will continue to the existing timetable. This is to provide businesses with clarity as early as possible on the policies that will apply from the end of the transition period, and enough time to prepare.

The government is confirming too that it is going ahead with its fundamental review of Business Rates, and a call for evidence will be published in the coming months.

Financial Secretary to the Treasury Jesse Norman said:

Consulting on tax policy is crucial to good tax law. And a good consultation makes sure everyone with an interest in the subject has an opportunity to have their say.

That is why we are extending these deadlines. The government is very grateful to the stakeholders who have already responded to these documents. But it is also acutely aware that there may be others who want to contribute but cannot do so because of the current situation with Covid-19. This extension should help them to do so.

Alongside the consultation extensions, the publication of some documents announced at Budget 2020, including work on tax conditionality and a consultation on stronger penalties for tobacco tax evasion, will be pushed back until the Autumn.

And the government will set out in due course when it will publish other tax policy documents, including the consultation on aviation taxation and a call for evidence on disguised remuneration schemes.

The government’s position on publication of tax policy documents will be kept updated through the public consultations tracker.

Chair of the Tax Professionals Forum and EY Head of Tax Policy Chris Sanger said:

Acting now to extend the deadlines for consultation is a welcome decision, as these consultations cover important issues that taxpayers need time to consider. Given the current environment, attention will naturally and rightly be focused elsewhere.

An extra three months should allow sufficient time for engagement, whilst still enabling the government to deliver important tax policy changes within the current fiscal timetable.

Full List of Extensions

The deadlines for responses to the following tax policy documents will be extended for three months, to allow stakeholders to engage fully with these documents and to contribute to the tax policy making process. However, the government encourages early responses from stakeholders where possible, to support its continuing consideration of these issues:

• Plastic Packaging Tax: Policy Design – now closing on 20 August 2020
• Preventing abuse of the R&D tax relief for SMEs: second consultation – now closing on 28 August 2020
• Tackling Construction Industry Scheme abuse – now closing on 28 August 2020
• Notification of uncertain tax treatment by large businesses – now closing on 27 August 2020
• Vehicle Excise Duty: call for evidence – now closing on 3 September 2020
• Call for evidence: raising standards in the tax market – now closing on 28 August 2020
• Consultation on the taxation impacts arising from the withdrawal of LIBOR– now closing on 28 August 2020
• Hybrid and other mismatches – now closing on 29 August 2020
• Tax treatment of asset holding companies in alternative fund structures – now closing on 19 August 2020
• Consultation: HMRC Charter – now closing on 15 August 2020

Further information

In the light of Covid-19, the Government has considered the publication of remaining expected tax policy documents on a case by case basis. For further information on all individual tax policy documents, please see the Financial Secretary to HM Treasury’s Written Ministerial Statement.