Uncertainty around major tax changes concerns CIOT

The Chartered Institute of Taxation (CIOT) is calling on the Government to confirm soon whether it plans to delay or extend major tax changes planned for Spring 2021 because of the ongoing economic impact of COVID-19. The plea for clarity by the end of January is to help businesses and people plan for 2021 with some confidence.

In March/April 2021, several significant tax changes will take effect that have far reaching consequences, especially for the property and construction sectors. There have been calls from politicians and business organisations, among others for a delay to some or all of the planned changes.

John Cullinane, Director of Public Policy at CIOT, said:

“We urge that any decision to extend or delay planned tax changes next Spring is clearly announced by the end of next month in order that business and individuals have adequate time to prepare.

“We hope the Government will confirm its plans in good time, well ahead of the expected March Budget, to create a more stable, predictable environment for businesses and people. If we give businesses more certainty now that will be good for our embattled economy, good for business investment, good for much-needed growth and good for government as well.”

Significant tax changes for business and individuals due to be implemented in Spring 2021 include:

  • VAT reverse charge on construction services (with effect from 1 March 2021)
  • Changes to the Construction Industry Scheme following the consultation on tackling abuse (with effect from 6 April 2021)
  • Off-payroll working rules – extension to the private sector (from 6 April 2021)
  • Introduction of the additional two per cent rate of SDLT for non-UK resident buyers of residential property in England and Northern Ireland (from 1 April 2021).
  • End of temporary increase in the threshold at which SDLT is payable on purchases of residential property in England and Northern Ireland (the SDLT ‘holiday’ last day being 31 March 2021)

John Cullinane continued:

“Businesses undertaking extensive preparations for these tax changes and their impacts, such as on cash flow, must know as early as possible, and no later than January 2021, if the Government intends to delay, or extend in the case of the SDLT ‘holiday’, any of these measures as a consequence of the ongoing COVID-19 pandemic. Early notice of any postponement is essential for industry and for individuals to provide certainty, minimise costs and allow for effective deployment of resources.”

John Cullinane added:

“Devolved governments will need timely notice of any decision to extend the current SDLT holiday to understand the effects of UK changes on block grant adjustments and have time to consider the implications for their tax policies, revenues and broader policies.”

Notes for editors

1. In addition to this public statement CIOT has written to the Treasury and HMRC asking that the Government’s plans with regard to these changes are clearly announced at an early date so that business and taxpayers have time to prepare.

2. The Chartered Institute of Taxation

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.