Other news in brief

A round up of other news this week.

A round up of other news this week.

On 4 November 2021, HMRC published their Annual Reports and Accounts for 2020 to 2021. Due to the COVID-19 pandemic, the economic environment was more challenging and HMRC made the decision to redeploy staff to facilitate COVID-19 support schemes and defer compliance activity. The economic impact of the pandemic is reflected in the total tax revenues raised in the period. The report confirmed that £608.8 billion in total tax revenues were raised in the year, lower than the £636.7 billion collected in the prior period. The report also included an assessment of several of the Coronavirus support schemes: the Coronavirus Job Retention Scheme (CJRS) supported 11.5 million jobs to 31 March 2021 with a net expenditure of £60.7 billion; the Self-Employment Income Support Scheme (SEISS) provided £19.7 billion in support to 2.7 million individuals; and £840 million was paid out to participating businesses in the Eat out to Help Out scheme. HMRC have published a provisional estimate of error and fraud in respect of these schemes, with fraud and error accounting for 8.7 percent for CJRS, 2.5 percent for SEISS grants and 8.5 percent of Eat out to Help Out. The report further outlined key HMRC commitments and their status, with a number of items marked as on track or completed. However, the Making Tax Digital (MTD) programme is currently classified as having an amber rating, indicating a risk to delivery. This is due to the recognition of the scale of implementing MTD for Income Tax Self-Assessment (ITSA).
On 4 November 2021, HMRC published a technical consultation on Plastic Packaging Tax draft regulations which “will ensure the tax operates as intended and will provide for administrative matters”. The consultation aims to gather feedback from stakeholders on the drafting of the statutory instruments to make sure they deliver the policy correctly and effectively ahead of its introduction in April 2022. Comments are requested by 1 December 2021. On the same day HMRC also published guidance for taxpayers on registering and submitting returns for Plastic Packaging Tax and guidance on registering a group of companies for the tax.

Amended Inheritance Tax (IHT) Regulations have been introduced to implement the Government’s commitment to reduce the administrative burden for those dealing with IHT in response to a recommendation from the Office of Tax Simplification. These new rules will apply to deaths on or after 1 January 2022. It is estimated that these changes will mean that more than 90 percent of non-taxpaying estates will not need to complete a full IHT account to obtain probate. They will remove anomalies such as the fact that the estate of a surviving spouse must complete a full IHT account simply if the first spouse made use of their nil rate band (or any portion of it), regardless of the value or makeup of the estate.

At Spring Budget 2021, the Chancellor announced the introduction of eight Freeports in eight English regions. A range of tax incentives will be available within the designated ‘Freeport tax sites’ including a 100 percent enhanced capital allowance for companies investing in plant and machinery, a new 10 percent rate for the Structures and Building allowance, as well as National Insurance contributions, business rates and stamp duty land tax reliefs. As promised at the Autumn Budget, secondary legislation has now been introduced to formally designate the first tax sites at the Humber, Teesside and Thames Freeports, referring to the maps previously published. The regulations confirm that these tax sites will come into effect on 19 November 2021.

Commenting on the ’Glasgow Breakthroughs’ announced at COP26 on 2 November 2021, Simon Virley, Vice Chair and Head of Energy and Natural Resources at KPMG UK talked about clean hydrogen and the role it will play in all sectors.
The health of the retail sector has hit a tipping point as significant cost increases bite into strong consumer demand, according to the latest retail health assessment by KPMG/Ipsos Retail Think Tank (RTT) analysts.