Weekly tax brief | 5 January 2021

Tax and fairness: the debate has changed
George Bull
After years of wrangling about how much more tax should be paid by other people, the debate has become more nuanced. Tax increases alone cannot repair the damage inflicted on the UK’s finances by the coronavirus pandemic, but the prospect of years of austerity is unthinkable. Is a 21st-century version of the Bretton Woods Agreement required to allow countries to address their debt responsibilities while focussing on job creation, rebuilding the global economy in a way that simultaneously meets climate change objectives?

Will U-turn over cross-border tax reporting provide the UK with a Brexit dividend?
Jackie Hall
Despite earlier indications that the Government would implement EU cross-border reporting of tax arrangements as intended, it is now abandoning the majority of those provisions in a surprising U-turn.  

Stamp Duty Land Tax holiday should be phased out gradually
Chris Etherington
The Government has confirmed that there will be no extension to the ‘SDLT holiday’ beyond the 31 March 2021 deadline but, with the country plunged into lockdown again, thousands of property purchases that are already underway risk being subject to significantly higher SDLT costs due to delayed completions.  Rather than risk disruption to the property market and chains collapsing, we call on the Government to rethink its response and consider a phased withdrawal of the SDLT relief.

No amnesty from HMRC on 31 January tax return deadline 
Gary Heynes
With all the uncertainties of another national lockdown, we hope HMRC reconsiders its stance and offers to waive all penalties for a short delay in submission of tax returns, beyond 31 January 2021, so giving certainty to many taxpayers.

Brexit deal revealed, but what does the future have in store?
Sarah Halsted
Businesses may have  breathed a sigh of relief when the UK and EU reached a last-minute agreement on their post-Brexit trading relationship, but what does this mean in practice from a customs perspective, and what challenges are likely to arise in the coming months?  

Preparing your 2019/20 tax return? Don’t forget the loan charge!
Sian King
With all the reminders about submitting elections to spread the loan charge by 31 December 2020, the impact this will have on future tax returns could easily be forgotten. If a taxpayer has elected to spread the loan charge over three tax years, the second instalment must be reported on the 2019/20 tax return by 31 January 2021, and the resulting tax liability paid. Failure to report the second instalment could result in an incorrect tax return, incurring interest and potential penalties.


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