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A feature of this year’s Finance Act was the requirement for the chancellor to publish a review of the effect of some of the provisions contained in the Act. Some were published with the spring Statement and the most eagerly anticipated report, on the loan charge, followed a few days ago.
I am not sure what MPs or the wider tax community were expecting from these reports, but they have generally been singularly unilluminating. Most of them merely contains words to the effect of ‘this legislation is new and we haven’t yet seen how it will work in practice’. The loan charge document is more extensive, but it has little new to say and certainly does not suggest that the government has been prompted to rethink any of the fundamentals.
There is a problem here. Reviewing the effectiveness of legislation is important and the UK has historically not had a rigorous post-implementation review process. But timing is everything and the review clauses in the Finance Act were too early. HMRC will not have seen returns affected by the relevant legislation. More thought should also be given to defining their scope. Simply asking for a ‘review of the effect of legislation’ gives a chancellor a huge amount of wiggle room over what to include. So if there are to be similar review clauses next year they need to be drafted in a significantly different way.
If you do one thing…
Voting is now open for the Tolley award for outstanding contribution to taxation in 2018-19; see tinyurl.com/tta-voc. We have eight exceptional candidates and it is up to members of our profession to vote for the winner. We have made the process as simple as we can and I would encourage all readers to vote. The result will be announced at the Taxation Awards dinner on 16 May.
