ATT Budget Representation - Income Tax Simplification

The ATT has submitted a Budget representation recommending four measures to simplify income tax and Self-Assessment. 

Our recommendations are as follows:

1. Provide an enduring ‘opt-in’ to Income Tax Self-Assessment (SA)

To simplify the position for taxpayers who would prefer to file tax returns despite not being obliged to under HMRC’s existing criteria.

2. Simplify jointly-owned property rules

Align the income tax treatment of assets jointly owned by co-habiting spouses/civil partners with that applying to other joint owners, to simplify the position by removing this differentiation in treatment and to avoid unnecessary side effects of abolishing the Furnished Holiday Lets regime.

3. Relax the rules on carrying back Gift Aid donations

Allow carry back of Gift Aid donations to the previous tax year via amendments to that year’s tax return, to remove an unnecessary complication, to increase flexibility, and to remove a potential obstacle to charitable giving.

4. Remove income covered by the savings allowance and dividend allowance from the calculation of Adjusted Net Income

This would align the treatment of income covered by the savings allowance and dividend allowance with income covered by the property and trading allowances for the purposes of the Adjusted Net Income calculation. The result would be reduced complexity for taxpayers, and fewer tax coding adjustments for HMRC to make.

Further details of each recommendation can be found in the full submission linked above.