Tax day has been introduced and is to take place on 23 March 2021 every year, which is also the anniversary of the first National Lockdown due to the pandemic. The reasoning behind Tax Day is because of the Treasury’s decision to introduce several changes to tax policy, which is usually included within the Budget, however this year it has been decided to separate the announcement of any changes into different 2 days, Budget Day and Tax Day.
Changes that were announced on Tax Day:
Whilst inheritance tax has always been complicated, the Office of Tax Simplification have made recommendations to remove some of the ‘Red Tape’ that surround this, therefore, to help streamline the process and remove some unnecessary complications.
From January 2022, simplifying the regulations, over 90% of non-taxpaying estates will no longer have to complete the Inheritance Tax forms that are usually required for probate confirmation when a death has occurred.
Due to the pandemic, a temporary measure was introduced for those that have been dealing with trusts or estates, meaning they have been able to process an Inheritance tax return without a physical signature. This temporary measure is now going to be made permanent.
Self-assessment to become pay-as-you-go?
The Treasury is holding consultations with the view to making self-assessment taxpayers pay the income tax and NIC more often, rather than the traditional once a year. Small Businesses could also see the same change for their corporation tax.
The criteria of what counts as a ‘holiday let’ is to change, this will be based on the number of days that the property is let annually. These changes are looking to be implemented to attempt to aim for the decrease on the number of people who pay cheaper business rates rather than council tax.
The Government introduced 100% business rates holiday in England throughout most of the pandemic. This is set to be reintroduced from June.
A review is being undertaken of the business rates, it is unlikely that this will be scrapped altogether, the review on this should be concluded by Autumn.