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Administration
Around 24m people will receive a personal tax statement in October, stating how their taxes were spent during the year.
Telegraph
The form says there is no need for recipients to contact HMRC – but they will anyway, increasing the strain on the department’s helplines. The Revenue would be better off investing in staff training, so that taxpayers can be sure they are paying the right amount of tax in the first place.
Avoidance & evasion
The chancellor, George Osborne, is facing a backlash from MPs, banks and charities over plans to give HMRC the power to access taxpayers’ bank accounts to seize unpaid tax. The Law Society has warned that the measure would erode taxpayers’ right to appeal.
Financial Times; Financial Times
Few will be comfortable with HMRC having the power to remove money from their bank account without permission. The proposal has yet to be enshrined in legislation and could be dropped, as happened in 2007.
A major initiative by HMRC to crack down on VAT abuse led to a £1.8bn jump in the tax raised last year, with most of it from small firms.
Mail
Two-thirds of the money raised will now have to be paid to Littlewoods in a recently won VAT compound interest settlement, unless HMRC successfully appeal. Small firms deserve punishment if they evade tax – but they do not warrant treatment as easy targets by the Revenue simply because they lack resources to argue cases they would likely win.
HMRC have been criticised in a House of Lords report for failing to justify a crackdown on freelancers and contractors setting up personal service companies to reduce their income tax and National Insurance bills.
Times; Financial Times
The IR35 legislation continues cause problems for many small businesses and their advisers. The government should either encourage risk-taking entrepreneurs and allow them to pay less tax as a trade-off for their lack of job security, or there must be a level playing field for both tax and employment rights.
Income
The UK has the most generous tax system for the low-paid throughout the G7 group of developed nations, according to Treasury research.
Guardian
Only The Guardian picked up the research, which seems not to have been given its own Treasury press release. In any case, it is impossible to compare the UK system, with no transferable allowance as yet, to those of other G7 countries, which frequently allow the transfer of allowances or joint filing of income.
Inheritance tax
The Conservative party would be better off scrapping inheritance tax (IHT) rather than increasing the threshold to £1m, the Institute for Fiscal Studies (IFS) think-tank has suggested.
Guardian; Financial Times
The IFS is actually calling for the whole IHT system to be overhauled. The organisation suggests taxing what recipients get, rather than what is passed on, and tightening up the regime to catch more assets by, for example, abolishing agricultural and business property reliefs and the seven-year PET system.
Property
The Liberal Democrats have revised their longstanding plans for a so-called mansion tax, and would instead impose higher council tax bills on homes worth more than £2m.
Independent; Financial Times; Telegraph
It is worth noting that the existing annual tax on enveloped dwellings would need only minor legislative tweaks to be converted it into a fully fledged mansion tax. A significant change to council tax would call attention to the lack of a revaluation in England and Scotland since 1991.
