Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world.

As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.

News

HM Treasury invites views on potential reform of capital allowances HM Treasury recently issued an invitation to comment on potential reforms to the UK's capital allowances regime. The overriding objective is to increase investment and growth in UK business. To meet this objective, HM Treasury seeks views on how businesses make investment decisions and the role of capital allowances in those decisions, the impact of the super-deduction, and the perception of the current UK capital allowances regime.

The invitation comes after an announcement in the 2022 Spring Statement that the government would engage in this area ahead of the scheduled end of the temporary super-deduction.

Responses to the invitation are requested by 5pm on 1 July 2022 and will inform any announcements in this area in the 2022 Budget.

Venture capital market: Treasury Committee call for evidence On 28 April 2022, the House of Commons Treasury Committee published an invitation to contribute to its inquiry on the venture capital market.

Matters on which the Committee seeks evidence include:

  • The current state of the venture capital industry in the United Kingdom, including opportunities and threats.
  • The operation and effectiveness of the regulatory regimes concerning venture capital.
  • The operation and effectiveness of the current tax incentives (such as the Enterprise Investment Scheme, the Seed Enterprise Investment Scheme and Venture Capital Trusts) in the venture capital market, including any options for change.

The deadline for submissions is 7 June 2022.

HMRC publishes framework for large businesses for co-operative compliance HMRC has published an addition to its Tax Compliance Risk Manual entitled Framework for Co-operative Compliance. The framework sets out the principles to which both HMRC and large businesses (those whose tax compliance is managed by HMRC's Large Business Directorate) should adhere.

A draft framework was published in December 2015, with HMRC originally intending the framework to be introduced in April 2016. Other than transfer pricing issues being dealt with separately, the final version of the framework is substantively the same as the draft version.

Changes made to NICs DOTAS regulations New regulations have been introduced amending the National Insurance Contributions (Application of Part 7 of the Finance Act 2004) Regulations 2012 (SI 2012/1868) (Disclosure Regulations), to align the NICs disclosure rules with changes that were made to the direct tax disclosure rules by Finance Act 2021. These are substantively the same as the draft regulations published for consultation in February 2022, save that they came into force on 1 June 2022, rather than on 25 May 2022.

The regulations amend the Disclosure Regulations to allow HMRC to allocate a scheme reference number (SRN) to an arrangement or a proposal for an arrangement that has not been disclosed to HMRC, but which HMRC has reasonable grounds for suspecting is notifiable. The regulations set out the process that HMRC must follow, the applicable time limits, the persons to whom notices and SRNs must be notified, their appeal rights and their obligations on receipt of a SRN. The regulations also contain information gathering powers and commencement provisions.