Select committee: Finance Bill Sub-Committee
Recommendation 27
2nd Report - Basis Period Reform and Uncertain Tax Treatments
Published 15 Dec 2021
Paragraph 119
Finance Bill Sub-Committee Draft Finance Bill 2021-22 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We recommend that, before legislating for this third trigger, an evidence-based evaluation of the measure in its current form be carried out to identify whether it does indeed deliver the benefits that HMRC tells us it is expecting. We also recommend that, if such an evaluation shows that the requirement is not delivering the benefits that HMRC expects, then the notification requirement in its entirety should be repealed.
From: Finance Bill Sub-Committee, 2nd Report - Basis Period Reform and Uncertain Tax Treatments, paragraph 119, 15 December 2021
Government response
The government responded to the whole report on 2 February 2022 (deadline 15 February 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government accepts two of the Sub-Committee's recommendations and partially accepts six, with the cover letter stating it "welcomes" the view that basis period reform should continue.
- On overlap relief and guidance, the Government "cannot commit" to the 5 April 2022 deadlines, but commits to publishing basis period reform guidance "as soon as possible after Royal Assent".
- It does not accept deferring Making Tax Digital for businesses without a 31 March-5 April year end, saying it "cannot justify differential treatment purely based on the date accounts are drawn up to".
- On provisional figures, the Government is "planning to explore" the issue with stakeholders from late February 2022, with a decision on whether and how to introduce an easement "by autumn 2022".
- On uncertain tax treatment, it commits to monitoring the regime and will explore a third trigger through informal engagement, with any decision "subject to full parliamentary scrutiny and debate".