Tax administration and maintenance summary: Spring 2024
Published 18 April 2024
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The government announced a package of technical tax policy proposals on 18 April 2024 that supports its ambition to make the tax system fairer and tackle non-compliance.
Measures
Consultation on the VAT treatment of Private Hire Vehicles
The government has published a consultation on the potential tax impacts of the Uber Britannia Limited v Sefton Borough Council High Court judgment that was handed down on 28 July 2023, and the Uber London Limited v Transport for London High Court judgment that was handed down on 6 December 2021, on the private hire vehicle (PHV) sector and its passengers. This consultation invites views on potential government interventions that could help to mitigate any undue adverse effects on the PHV sector and its passengers.
Consultation on the VAT treatment of Private Hire Vehicles
Tackling Non-Compliance in the Umbrella Companies Market
The government remains concerned about the scale of non-compliance in the umbrella company market, and the detrimental impact that this has on workers, taxpayers and the labour market. Last summer, the government consulted on options to reduce tax non-compliance in the market and will publish a response to its consultation in due course.
To support workers and businesses that use umbrella companies, HMRC will publish new guidance later this year, including an online pay checking tool to help umbrella company workers to check whether the correct deductions are being made from their pay.
The government is minded to introduce a due diligence requirement to drive out bad actors from labour supply chains. To this end it will continue to engage with the recruitment industry and other key stakeholders on the detail of a statutory due diligence regime for businesses that use umbrella companies, and ensure it has the best understanding of the impacts that this could have on reducing non-compliance.
VAT Treatment of Charitable Donations
In order to encourage charitable giving the government will consult on introducing a targeted VAT relief for low value goods which businesses donate to charities for the charities to give away free of charge to people in need. The consultation will be launched later this year.
Mandating postcode provision for Freeports and Investment Zones National Insurance contributions reliefs
The government intends to bring forward a legislative change to mandate employers operating in a Freeport or Investment Zone special tax site to provide their employee’s workplace postcode to HMRC if they are claiming the relevant secondary Class 1 National Insurance contributions (NICs) relief through their payroll, in due course.
The relief is conditional on 60% of the employee’s working time being in the tax site. The collection of this data, which employers should readily hold, will help reduce employer error and enable assurance of claims by HMRC without generally requiring HMRC contacting the employer.
The government is publishing a four-week technical consultation on draft regulations. Following the consultation, secondary legislation will be brought forward in due course, allowing software developers time to make the changes ahead of implementation.