Described as the ‘start of a conversation’ about the current tax payment system, this call for evidence focuses on a potential overhaul of the way Income Tax and Corporation Tax is paid.
The aim is for ‘a modern system should allow people and businesses to understand how much tax they owe, and why, and to pay the right tax with ease’. A cashflow exercise for both the individual and the government.
HMRC already offers a Budget Payment Plan for ITSA taxpayers who are up to date with their self-assessment payments and wish to make regular weekly or monthly payments (of an amount they choose) towards their next tax bill via their HMRC online account, however the facility is not easy to find, set up or manage.
Alongside this, they are also looking at how to make voluntary regular payments of Corporation Tax available more easily to companies that do not have to pay quarterly. They recognise the importance of aligning the two taxes as far as possible to remove the risk of distortions moving people towards tax-motivated incorporations.
At Budget 2021, the government announced investment in HMRC systems to improve the Budget Payment Plan offer for Income Tax over the course of 2021-22.
This improved system will be linked to the individuals tax account and ear marked ‘at key points in the customer journey’.
Similar reforms to Corporation Tax are likely to be shaped around the format of Making Tax Digital for CT, which is still at the very early stages of formulation.
More details on the consultations and proposals from ‘Tax Day’ will be published in our news feed today, or you can email us at Tax@randall-payne.co.uk and we can arrange a call back to discuss anything in more detail.