UK: Weekly Tax Update - Monday 21 March 2011

Last Updated: 24 March 2011
Article by Richard Mannion

1. Private Clients

1.1 Principles of Tax Policy and Tax Policy Making

The House of Commons Treasury Committee paper on principles of tax policy has been published, concluding that tax policy should:

  • be fair (recognising that there are different definitions of fairness);
  • support growth and encourage competition;
  • provide certainty (it should not normally be necessary for anyone to resort to the courts in order to resolve how the rules operate in relation to his or her tax affairs. Certainty about tax requires:
  • Legal clarity - Tax legislation should be based on statute and subject to proper democratic scrutiny by Parliament. However the report does not consider the role of the House of Lords, or the possible Joint Parliamentary Committee, which is something the CIOT has been pressing for and is an issue that was within the scope of the Treasury Committee's review.
  • Simplicity: The tax rules should aim to be simple, understandable and clear in their objectives.
  • Targeting: It should be clear to taxpayers whether or not they are liable for particular types of charges to tax. When anti-avoidance legislation is passed, due regard should be had to maintaining the simplicity and certainty of the tax system.
  • provide stability - changes to the underlying rules should be kept to a minimum and policy shocks should both be avoided. There should be a justifiable economic and/or social basis for any change to the tax rules and this justification should be made public and the underlying policy made clear;
  • practicable to ensure that a person's tax liability should be easy to calculate and straightforward and cheap to collect;
  • coherent – the tax system as a whole should be coherent and new provisions should complement the existing tax system, not conflict with it.

1.2. Proposed timetable for future Budgets and Finance Bills

  • The House of Commons Treasury Committee's report referred to above includes the following note regarding the proposed timetable for future Budgets and Finance Bills:

"Scrutiny of tax

  • 76. Tax policy and legislation could be and should be better scrutinised. This is not something that Parliament can do alone; the Government and tax profession must also play a part.
  • 77. As we have already noted, the previous administration introduced reforms to give more time for consultation on tax changes. Where possible, it published draft clauses in advance of tax legislation. This was welcome. The current Government has taken further steps to extend the time between policy formulation and enactment to allow time for better consultation before legislation is drafted and a further opportunity before it is enacted.
  • 78. The proposal is that there will be:
  • A Spring Budget in which policy proposals are announced for consultation
  • Draft Finance Bill clauses, published for comment in late summer.
  • Finance Bill published in the autumn
  • Finance Act published around the end of the calendar year to take effect from the following April.
  • 79. This will also mean that the Finance Act is in place well ahead of the tax year it will first affect. Even though 2010 was a transitional year, we have seen already more time being built into the budgetary timetable, in which a short post election Finance Bill in June was complemented by a further Bill in the autumn, which had been preceded by the publication of draft clauses in July. The Finance Bill 2011, is following the same pattern: draft clauses were published for comment on 9 December 2010 and we already know the Bill itself is due to be published on 31 March 2011. We have already welcomed this more deliberate approach to tax policy making."

1.3. Impact assessment of tax and national insurance contributions policy changes

The Exchequer Secretary to the Treasury (Mr David Gauke) issued a Written Ministerial Statement on 15 March 2011 as follows:

"As set out in "Improving tax policy making: the new approach" published on 9 December 2010, the Government have adopted a new process for undertaking impact assessment of tax and national insurance contributions (NICs) policy changes. This new tailored tax impact assessment process will be used throughout the development of tax and NICs policy and will be summarised in tax information and impact notes. These notes set out what the policy change is, why the Government are proposing the change and a summary of the impacts of the change. As explained below, they will be produced for all substantive changes in tax and NICs policy by primary and secondary legislation.

This new approach will consider a wider range of impacts and cover a broader range of policy changes than the existing impact assessment regime for tax. The Government are committed to consulting on tax policy changes and will use consultation and stakeholder engagement to inform and test their understanding of the impacts of a proposed change in policy.

From Budget 2011 onwards, the Government will publish a tax information and impact note for tax policy changes at the point at which the policy design is final or near final. This could be alongside the Budget, publication of draft legislation or final legislation, as appropriate. These notes will provide a clear statement of the policy objective, impact on the Exchequer, the economy, individuals, businesses and civil society organisations, as well as any equality and other specific impact.

Tax information and impact notes will be available on the websites of HM Treasury and HM Revenue and Customs, and will be provided to Parliament through the normal publication channels.

There will be a number of exceptions where a tax information and impact note will not usually be published alongside a routine legislative change that gives effect to previously announced policy, for example:

  • changes to rates, thresholds and allowances to a predetermined formula such as indexation;
  • appointed day orders;
  • secondary legislation enacting double taxation treaties; and
  • secondary legislation not laid before Parliament.

1.4 HMRC Bank of England accounts closing

HMRC introduced a new bank account for HMRC Flexible Accounting System (FAS) in March 2009. The old Bank of England account will close at the end of March 2011 and it is therefore essential that all future HMRC FAS CHAPS and BACS payments are made using the new account details.

1.5. Reasonable excuse for not complying with online filing

HMRC has published guidance on what it may generally consider to be a reasonable excuse and what should be done if you want to appeal against a late filing penalty.

To read this weekly update in full please click here.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Richard Mannion
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.