Tax commandments for business

Peter Mason explains how those beginning or already in a tax role in business can address the key elements of tax leadership and management

So, you’ve made it! It’s the best job, the role you’ve always wanted – and now it’s yours. Then it dawns upon you; it’s your show now, and you need to work out what to do next!

There is conspicuously limited guidance out there to help you in a corporate tax role. For this reason, I will review the Tax Commandments for Business to steer you towards success. These underlying principles of good tax management apply to everyone within a company’s tax team, including advisers, tax authorities engaging with a tax team, and even other finance professionals. In any tax role, you will need to understand the techniques of leadership.

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The CIOT responded to the call for evidence published on 21 July 2020 on the Modernisation of the Stamp Taxes on shares framework, agreeing that modernisation would be welcome and saying that the aim should be for a new, modernised framework which is based on a single tax and introduce a self-assessment system of tax.

The stamp taxes on shares (STS) framework encompasses the legislation, guidance and administrative processes that allow HMRC to administer stamp duty and SDRT. In our response to the call for evidence exploring how the framework could be modernised, the CIOT said that we hoped that this call for evidence is the start of a medium to long term project. We envisage a new, modernised STS framework which is based on a single tax and would:

The CIOT responded to the business rates call for evidence.

A theme of our response to the call for evidence is that while historically business rates were regarded as a property cost, they are now increasingly perceived as a tax, albeit one charged by reference to rental value rather than profit. There is therefore a case for making the business rates system more integrated with and aligned to the wider UK tax regime.

We pointed to areas where the principles of good tax design should apply to the business rates system, for example:

The House of Lords commenced its inquiry into the draft Finance Bill 2020-21, concentrating on the measures relating to HMRC’s powers and tax administration matters. The CIOT and LITRG provided written and oral evidence to the inquiry. The ATT provided oral evidence.

On 11 September, the House of Lords Finance Bill Sub-Committee opened its inquiry into the draft Finance Bill 2020-21. The

Sub-Committee undertakes a similar inquiry each year, and this year is focusing its attention on those measures which provide HMRC with additional powers, or place additional obligations on taxpayers. The Sub-Committee’s inquiry focuses on three areas of the draft Bill:

Jo Maughan asks what you can do to nurture your mental health to survive, even thrive, this December

I’m sitting at my red, shiny-topped desk feeling fed up. I look at the bright postcard of the blue and yellow tiled villa in Barcelona next to my screen. No change. I go downstairs and make myself a proper coffee – black, americano. I sit on my grey sofa to drink it. No change. I go upstairs to print out my seven page report to review, and start to read it from the sofa. No change. I still feel glum, fed up and frustrated with Covid-19. You? Many of my coaching clients are feeling variously lonely, depressed, frustrated, sad and despondent, even though Christmas is coming.

Keith Gordon looks at a case which concerns the interaction of the high income child benefit charge and the discovery provisions

One of my earliest tax memories was the announcement in the 1988 Budget concerning the proposed introduction of ‘independent taxation’ of married women, to come into effect from 6 April 1990. More than three decades later, it probably seems inconceivable to many advisers that married couples had to combine their income for tax purposes (and, perhaps, even more so, that the wife was far from an equal partner in the relationship so far as the former Inland Revenue was concerned).

As anachronistic as it might sound, it should be recalled that dependent taxation is not completely confined to history. Those who advise on social security benefits will be aware that household income remains an important feature.

Sharron West explains how HMRC can help taxpayers to manage their liabilities during Covid-19

During these unprecedented times, many individuals and small businesses are suffering financially due to the Covid-19 pandemic, with less or no income, ongoing expenses, and some facing responsibilities for employees. Consequently, many taxpayers may be worrying about how they are going to be able to pay tax liabilities that will become due in the early part of 2021.

It has always been advisable to contact HMRC as soon as possible if there is a difficulty meeting a tax bill. HMRC often allows taxpayers to clear their tax bill by making regular payments over an agreed period of time, tailored to their specific circumstances. This is known as a ‘time to pay’ (TTP) arrangement.

Meg Saksida reviews the changes being made to main residence relief and the benefits that may be available to homeowners

On 22 July this year, Chancellor of the Exchequer Rishi Sunak delivered his first budget, making several changes to the capital gains taxation (CGT) of main residences, predicted to generate £50 million in revenue in 2020/21 alone, and up to £150 million by 2023/24. The changes came into force on 6 April 2020.

Changes are being made to ensure that the benefit of the main residence relief lies with the owner occupiers of the homes rather than the owners. It was felt that in the past the benefits were more advantageous to taxpayers who were not occupying the homes these benefits derived from, particularly with reliefs such as lettings relief and the final period exemption of 18 months (36 months prior to 2014).

With the UK committed to a 100% net reduction in greenhouse emissions by 2050, Jason Collins and Lauren Redhead consider the future of environmental taxation

Wherever you might sit in the spectrum of views on climate change, the UK has legally committed itself to reaching a 100% reduction in net greenhouse gas emissions by 2050, using 1990 as the baseline. This article looks at the role the tax system may have to play in meeting that target. The government has committed to a ‘clean, green recovery’ from the coronavirus pandemic in terms of government stimulus. For many, it is clear that taxes are also going to have to rise to pay for the sums expended on supporting people during the pandemic. Should the government ensure that such rises have a twin aim of meeting the 2050 target?

In his second article, Neil Warren considers practical VAT issues that will apply from 1 January 2021 when the UK’s transitional deal ends with the EU, focusing on goods involving overseas sellers and online marketplaces

What will be the significance of a shipment of goods that arrives in GB from 1 January 2021 that has a value of less than £135? The answer is that the goods will be subject to ‘sales VAT’ from this date, rather than ‘import VAT', if they are being imported by an overseas seller. This is a major change in procedures, and there are some tricky twists and turns to consider. The VAT issues will also affect the buyers of the goods, as well as online marketplaces from which overseas sellers advertise their goods in many cases.

Bill Dodwell considers the Office of Tax Simplification’s first report on its capital gains tax review

The Office of Tax Simplification published its first report on its capital gains tax review, ‘Simplifying by design’ on 11 November. The report arrived four months after the chancellor’s request to ‘identify opportunities relating to administrative and technical issues, as well as areas where the present rules can distort behaviour or do not meet their policy intent’. This report looks at policy design and principles and, in particular, at distortions in the system of taxing capital gains.

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Tax Adviser magazine and our weekly technical news service emails (CIOT News Service for CTAs and News service for ATTs), are two of the key benefits of membership.

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The weekly technical news service is sent by email every Friday. It contains technical news from the CIOT and ATT, as well as feature articles and tax updates by specialism.

Tax commandments for business

Peter Mason

A ‘secret’ appeal

A tale of two countries (or more)

Self Assessment tax returns: your FAQs

The changing tax environment

The costs of a wealth tax

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Tax commandments for business

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Peter Mason

A ‘secret’ appeal

A tale of two countries (or more)

Self Assessment tax returns: your FAQs

The changing tax environment

The costs of a wealth tax