Weekly tax brief | 25 January 2022

In this edition of RSM’s weekly round-up of the most important tax news, we cover the latest developments. Please feel free to share this update with any of your colleagues and invite them to sign up to our regular briefings here.

Scrapping Health and Social Care Levy won’t fill the household bill hole
Chris Etherington
The cost-of-living crisis will reportedly cost households around £700 a year on average in increased energy bills alone according to research by the Resolution Foundation.  There have been calls for tax cuts and, in particular, for the planned Health and Social Care Levy to be scrapped, but such a move is more likely to benefit the most well off.

Tax receipts – a moment of quiet confidence for the Chancellor?
George Bull
Latest data from HMRC show a solid boost to tax receipts, with VAT back on track and personal taxes, corporate taxes and stamp taxes all pouring into the Exchequer at record levels in December 2021.

Concerns raised over sample size for Making Tax Digital for Income Tax 
Lucy Chaplin and George Bull
Accountants and software developers have raised concerns about HMRC’s pilot scheme to test its new Making Tax Digital system, which will be rolled out to more than four million self-employed workers in 2024. With only nine participants currently involved, the pilot wouldn’t even meet the requirements for undergraduate students completing their dissertation. We add our voice to those raising concerns over whether the system will be fit for purpose.

Wealth and equality: paying their fair share?
Kate Aitchison 
One hundred of the world’s most wealthy have written an open letter to the World Economic Forum encouraging governments to tax the rich as “few if any of us can honestly say that we pay our fair share in taxes”. But is new tax law really necessary to collect more tax from the ultra-wealthy?

Why tax makes Venture Capital Trusts an investment worth considering
Tim Parr
Figures released by the ONS (Office of National Statistics) last week show Venture Capital Trust companies (VCTs) to be a relatively small but interesting investment class. Does the generous VCT tax regime make VCTs an investment worth considering, particularly for additional retirement savings?

Court defeat for climate campaigners makes North Sea windfall profits tax more likely
George Bull
By recognising that oil and gas companies can make more money from subsidies than they pay in taxes, a courtroom decision in favour of the Oil and Gas Authority may work against North Sea oil and gas producers which are enjoying a period of exceptional cash flow. The question for the Chancellor has now changed: why would he not introduce a windfall profits tax?