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Government publishes a raft of tax consultations

The Treasury has issued nine consultation papers on various aspects of the personal and business tax system in what amounts to a far-reaching overhaul of the entire regime.

The papers are asking for views on, among other topics, a reform of the PAYE system, pensions tax relief and inheritance tax.

Announcing the consultations, David Gauke, the Treasury Secretary, said: "We want to make the tax system simpler and work better for the taxpayer. By reducing burdens, making the right choices and involving taxpayers, we are sending a very clear signal that Britain is open for business.

"We are committed to a more considered and open approach to tax policymaking. That is why consultation and scrutiny of our tax policies will be the cornerstone of our tax policymaking process. I want to encourage relevant parties to provide their feedback on the tax consultations we have published."

The papers follow on from a series of tax changes introduced in the emergency Budget and from the government's commitment to simplify the overall tax system.

Other tax issues that will be assessed include furnished holiday lettings, associated company rules, foreign branch taxation, the controlled foreign company regime and the modernisation of investment trust company rules.

All start-ups should get NIC holiday as confidence stays fragile

A leading business group has urged the government to extend the promise of a national insurance contribution holiday for new businesses right across the country as a new survey shows business confidence in decline.

The Federation of Small Businesses (FSB) said that its latest business index survey recorded a worsening of confidence in the second quarter of 2010. In a survey of over 1,200 firms, only 4% of respondents believe that business prospects will improve in the third quarter of the year, down from 16% in March.

The survey also suggested that almost 67% of small firms are operating below capacity, with those in the manufacturing sector faring much better than service sector firms. The findings further highlighted how the UK economy is still some way from a full-speed recovery, the FSB argued, with 64% of firms in the south east of England likely to be working below capacity, more than anywhere else in the country.

The Government announced in the emergency Budget that the South East, London and the East of England would be exempted from a proposed national insurance holiday for new businesses.

HMRC's latest enquiry initiative

The latest new initiative within HMRC appears to be known as the ‘Dash for Cash’.

Inspectors are being tasked to bring in as much money as possible, as quickly as possible. We understand there will be pressure to settle long running full enquiry cases and Inspectors will be encouraged to take up aspect cases which are likely to be settled more quickly to optimise the tax yield in the current fiscal year.

We have heard from several regions that HMRC will be going back to ‘single’ case working as the new ‘Cross Tax’ enquiry framework is not working as they had hoped and is slowing up the enquiry process.

HMRC issued twice as many enquiries during June 2010 as they did in June 2009 and we expect that enquiry levels will continue to increase over the coming months. 

Emergency Budget 2010

The Chancellor, George Osborne may never deliver a more significant Budget speech than his first. The Government is faced with the twin imperatives of curbing public borrowing while encouraging growth in the private sector.

Describing the Budget as 'tough but fair', Mr Osborne set out a strategy of fixing public finances through a balance of 77% in spending cuts and of 23% in tax rises. The aim is not only to eliminate the bulk of the structural deficit - that part of Government borrowing that does not decline as the tax take climbs - by 2015/16 but actually to balance the books.

Access our 22 June 2010 Budget Report