On 30 November, the government published new and updated consultations to modernise and simplify the UK’s tax system and tackle non-compliance.

Senior associate Julia Cockroft shared her thoughts with LexisNexis on the new consultations and further developments for future tax policy: “The second ‘Tax Day’ of 2021 has, in my view, not been as exciting as hoped. Most notably missing from the published documents was the consultation referred to on Budget Day relating to the potential introduction of an online sales tax in the UK. Perhaps crafting a proposal that cannot be confused with a digital services tax (and therefore offend the OECD mandate that no country should introduce any new ‘DST-like’ tax during the Pillar 1 implementation period) has proved to be quite challenging?

The response to the consultation on simplifying the VAT land exemption was also somewhat of an anti-climax. It is clear that the Office for Tax Simplification’s suggestions around removing the option to tax will not be taken forward. While loose commitments have been made to continue to engage with stakeholders in relation to some specific suggestions, including establishing a comprehensive register of options to tax and reviewing the option to tax anti-avoidance rules, large-scale reform of the VAT land and property rules is off the cards. There is a renewed commitment on HMRC’s part to improve and update guidance but taxpayers will need to wait until next year for clarity on certain key issues, including HMRC’s long-awaited published view on the correct VAT treatment of dilapidation payments following the controversial publication, followed by the decision to postpone the application, of Revenue & Customs Brief 12/20.”

This article was first published on LexisNexis, November 2021. For more information on the work we do, check out our tax expertise page.