Understanding new tax laws


Just as tax brackets and tax rates change on a frequent basis, the primary tax laws in the UK are also subject to frequent alteration.

Fortunately, many of the recent (in 2013) changes to existing tax laws and new tax laws that have been implemented in the past few years have been modified with the aim of making the legislation clearer and easier to use, but without changing the actual substantive law.

This is part of the HM Revenue and Custom’s ‘Tax Law Rewrite Project’ which aims to create better transparency and enhance ease of use by rewriting new tax laws.

How tax law works

The vast majority of the UK tax laws do not change radically from year to year. However, many of the monetary thresholds that some tax laws have are revised with each year’s budget:

  • A good example is the personal allowance threshold for income tax. These changes do not constitute new tax law, but you and your business must take these changes into consideration

When a new tax law is brought in, it can take some time for the new law to be fully appreciated by the individuals and businesses it could affect. It is your responsibility to ensure all of your tax affairs are in order and comply with each new tax law as they appear.

Remember, ignorance is no defence in a UK court. This is why using the services of a qualified solicitor to clarify any points of an existing or new tax law is vitally important to avoid prosecution.

Also, HMRC isn't perfect. Each year several thousand mistakes are identified on tax returns. If you feel you have a case to appeal against your tax demand, your solicitor can speak for you. The courts will want to see documentary evidence about your claim. And if you feel that any new tax law has been unfairly applied to you or your business always seek qualified legal advice.

New tax laws

One of the most recent new tax laws is the Corporation Tax Act 2009, implemented in March of that year. The explanatory notes to the Act makes clear that any minor changes are intended for clarification and should generally not affect the position of the law on corporation tax. The Act, however, does simplify a number of provisions, such as those relating to:

  • Trading and property
  • Intangible fixed assets
  • Expenditure on research and development
  • More common aspects of corporation tax such as accounting periods and provisions on calculating charges

Other new tax laws that have been implemented for the reason of simplifying or clarifying the current law include the Income Tax Act 2007, which now simplifies the provisions on:

  • The charge to income tax
  • Various reliefs and trusts
  • Also provides general definitions about income tax

This new focus in new tax laws should greatly help in understanding the basic elements of tax. Nevertheless, there are still complexities to tax law that only specialist tax law advisers can help you with. If your financial position is at all complex, you should speak to a specialist tax solicitor.

Do you need help applying a new tax law to your business? Contact Law can put you in touch with a solicitor specialising in tax advice to help you run your business in accordance with any new law reforms. Please call us on 0800 1777 162 or complete the web-form above.

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