You may not have had it marked in your diary, but 23 March 2021 saw the UK’s first ‘Tax Day’.

It was the day the Government unveiled a series of measures designed to enhance the stability and effectiveness of the UK tax system.

These measures have been outlined in the Tax Policies and Consultations (Spring 2021) document, which aims to shape the next steps in delivering the Government’s 10-year tax administration strategy.

The paper covers a range of important tax issues, including business rates and environmental taxes, as well as simplification measures.

What is Tax Day?

The day was a chance for the Treasury to announce changes to tax policy that weren’t revealed alongside the Budget a few weeks ago.

Financial Secretary to the Treasury, Jesse Norman, said: “By announcing these measures and consultations separately from the Budget, we are seeking to create greater visibility and transparency for Parliamentarians, tax professionals and other stakeholders.

“We hope that increased scrutiny of tax measures will increase the overall quality of tax policy and legislation, on which millions of taxpayers ultimately rely.”

The Government is now inviting you to put forward your views and feedback, both on the content of the announcements and on the wider approach to developing tax policy.

Here, we look at a few of the measures that feature in the document…

Reduction in inheritance tax ‘red tape’

A welcome change is the simplifying of inheritance tax (IHT) reporting.

From 1 January 2022, more than 90% of non-taxpaying estates each year will no longer have to complete IHT forms for deaths when probate or confirmation is required.

What’s more, the current temporary provision for those dealing with a trust or estate to provide an IHT return without needing physical signatures from all those involved, will be made permanent.

Reporting regulations will also be updated to clarify the requirement for estates to submit an IHT account where the deceased was never domiciled in the UK but owned indirect interests in UK residential property.

Residential property developer tax

The Government will publish a consultation on a new tax on the largest residential property developers.

The tax will be introduced in 2022 to help cover the costs of cladding remediation.

Taxation of trusts

A summary of responses to the 2018 consultation, The Taxation of Trusts: A Review, is being published.

The responses didn’t suggest a desire for a comprehensive reform of trust tax at this stage, but the issues raised will be kept under review.

Our thoughts

The Tax Day announcements show the difficulty the authorities have in trying to balance a simple, easy-to-use and understand tax system, with the complexities of preventing tax avoidance and evasion. It’s the nirvana any government would like to reach but we’re still a very long way off achieving that with the current system.

Helping you with your tax

At Churchill Taxation, our team have the skills and experience to advise you on a range of tax matters, including inheritance tax, property tax, and trust and estate tax.

Call us today on 07813 434195 or email stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation