Jonathan Smith
Director of Tax
The government has put its plans on hold to kill off the annual tax return and move to a brand-new digital taxation system because of the General Election.
It has also shelved its plans to instigate a sharp increase in probate fees from May 2017, because it now lacks the time to get the necessary legislation in place.
Digital reporting
The government was forced to drop its controversial Making Tax Digital proposals from the Finance Bill in order to enable it to be debated before Parliament rises on 3 May.
The news will be particularly welcome for unincorporated farming and property businesses, who have been concerned about the administrative burden that moving to a quarterly reporting system would bring.
Farmers and landowners have also warned that lack of reliable high-speed broadband connections in some rural areas could make the move to a digital system extremely difficult.
While it is likely that the proposals will re-emerge at some point in the future, it is hoped that the delay will allow the arrangements to be given greater scrutiny before they are finally implemented.
Probate fees
The probate fee proposals would have affected a significant number of people, with executors of estates worth more than £2m looking at fees rise from a few hundred pounds to almost £20,000.
The requirement to pay the money upfront, in full, before a will was processed could have proved particularly challenging for farmers and landowners who sometimes face the problem of being asset rich, but cash poor.
However, we need to be mindful that this is the way that government is now thinking. While the decision gives everyone breathing space, it is possible that similar proposals could be brought forward in future.
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