A review of the implications for business.

The inaugural Tax Administration and Maintenance (TAM) Day probably passed most businesses by. The name rather leaves the impression that this is a day that has been set aside for tax advisors and accountants. However, closer inspection by business will have been rewarded by some welcome announcements.

The aim of TAM Day is to continue simplifying the UK tax system. Documents released to mark the first one included a range of topics, including modernising the UK tax system so it is fit for the 21st Century; research and development (R&D); business rates; updates to Making Tax Digital (MTD) for companies; and capital gains tax (CGT) administration. Here, we look at some of the key announcements.

Business rates review

In response to a long campaign by business groups, the government has opened a technical consultation setting out further detail on the conclusions to the government's review of business rates in England. This has promised more frequent revaluations, improvement relief, exemptions for green technology and administrative reforms.

R&D reform

Another Budget announcement promised that R&D tax reliefs will be reformed from April 2023 to support modern research methods. The consultation around these changes has now been completed and the report published. This will expand qualifying expenditure to include data and cloud costs. The objective is to more effectively capture the benefits of R&D funded by the reliefs by refocusing support towards innovation in the UK. It is also intended to target abuse and improve compliance. 

CGT time limits

As already revealed during the Autumn Budget, the time limit for making a CGT return and associated payments on account when disposing of UK residential property by UK residents and UK land and property by non-UK residents has been extended from 30 to 60 days.

MTD for Corporation Tax

The government also confirmed its plans to extend MTD to corporation tax (CT) following a consultation with businesses. It confirmed the timeline, which will see the rules applying for companies from April 2026.

The government says it is committed to ongoing collaboration with stakeholders to help shape a service design that works for all and will provide sufficient notice ahead of implementation following any decision to mandate MTD for CT, to allow businesses time to prepare.

A point to note is that there is no de minimis exemption for smaller businesses. A pilot is expected in April 2024, allowing practice before the system is mandatory.

Small Beer

An update on reforms to Small Brewers' Relief will see the government invest around £15 million of additional funding into the craft brewing sector. This will enable small breweries to expand without losing tax relief and addresses concerns raised by stakeholders that the current scheme fails to incentivise growth.

Ten-year plan

The government says its aim is to deliver a modern, simple and effective tax system which helps taxpayers get their tax right the first time. This is all part of the ten-year plan, which was published in July 2020, to modernise the tax administration framework; make better use of real time and third-party information; and progress MTD to improve the experience for taxpayers and businesses, thereby helping to reduce the tax gap and increase resilience.

How we can help

The issues raised here may have implications for your business. To discuss any related matter, please contact us.