The Financial Secretary to the Treasury, Jesse Norman MP, has published a Written Statement in the House of Commons, titled Tax Policy Update. The Statement provides updates to previous announcements and outlines new policy announcements. A summary is as follows.

Previous announcements

The Government is publishing summary of responses and draft legislation for each of the following measures, as announced at the Spring Budget:

• Plastic Packaging Tax
• Tackling Construction Industry Scheme abuse
• R&D SME tax credit PAYE cap
• Tax implications of the withdrawal of the London Inter-Bank Offered Rate (LIBOR)
• Hybrid and other mismatches
• Raising standards in the tax advice market

The Government also announced that it will publish two consultations:

1. The first will be published in the new year on further measures to tackle promoters. These proposals will build on the proposals announced earlier this year and will:

1. • Disrupt the business model of offshore promoters by making it harder for such promoters to access the UK by making their onshore partners equally responsible for the anti-avoidance regime penalties that the offshore promoter generates.
   • Directly tackle the secrecy on which promoters rely; the proposals here would ensure that taxpayers are fully informed of the reality of what is being sold to them.
   • Disrupt the economics of tax avoidance by ensuring that, without delay, promoters face financial consequences for continuing to promote tax avoidance so that promoters cannot continue to profit from avoidance while HMRC investigates them.
   • Give HMRC additional powers to act against companies that continue to promote schemes and who sidestep the rules designed to restrict their activities. The proposals would see such promoters shut down and restricted from setting up similar businesses.
2. The Government will also publish a consultation on the design of Making Tax Digital for Corporation Tax. This will allow stakeholders to inform the early stage design of Making Tax Digital for Corporation Tax and to provide businesses with time to prepare.

Further policy announcements

The Government has made several further policy decisions relating to:

Extending the Annual Investment Allowance provisional £1 million cap

The Government announced a yearlong extension to the temporary increase of the Annual Investment Allowance (AIA). The AIA provides firms 100% same year tax relief on qualifying capital expenditure, up to a fixed limit. Instead of allowing the AIA to revert to £200,000 from 1 January 2021, the Government is extending the temporary £1 million cap set at Budget 2018 until 31 December 2021. This announcement:

• Responds to the needs of business, giving enhanced tax relief on plant and machinery expenditure
• Provides businesses with upfront support during continuing COVID-related uncertainty
• Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.

Van Vehicle Excise Duty

The Government will not now introduce a new graduated system of Vehicle Excise Duty for light goods vehicles or motorhomes from April 2021, to avoid distracting the automotive sector and businesses more widely from the challenges they currently face in light of the COVID-19 pandemic. Motorhomes will continue to be placed in the Private/Light Goods class.

Off-payroll working – technical change to ensure legislation operates as intended

A technical change to the off-payroll working rules will be made in the next Finance Bill. This will ensure the legislation operates as intended from 6 April 2021 for engagements where an intermediary is a company. The change will correct an unintended widening of the definition of an intermediary, which went beyond the intended scope of the policy.

Notification of uncertain tax treatment by large businesses

The Government is announcing the implementation of the new requirement for large businesses to notify HMRC of uncertain tax treatments will be delayed until April 2022. This will allow more time to get the policy and legislation right following the recent consultation, including through further engagement with stakeholders, and will give affected businesses more time to prepare for the change.

Timely Tax Payments and Review of Tax Administration Framework

On 21 July, the Government committed to publishing calls for evidence on Timely Tax Payments and a Review of the Tax Administration Framework. Given the continued pressures of the COVID-19 outbreak, and with other consultations in progress, the Government will now publish these documents in Spring 2021.