Our tax system is far too complicated, but I’m afraid we are stuck with it until politicians genuinely grasp the nettle of simplification, and they seem to have other matters on hand at the moment.

The Government announced last September that Making Tax Digital for income tax self-assessment would be delayed by a year and will not start until April 2024. The same applies to their controversial proposals on “basis period reform”, which would restrict the way income is allocated to tax years, and earlier tax payment dates for the self-employed.

But this is a postponement, not a cancellation, so those affected should take the opportunity to get ready well in advance. Incidentally, this includes landlords if their annual rental income is over £10,000. If a landlord is also a sole trader, their income from their business is added to their income from properties in applying this test. 

So what is coming before then?

As we know, there will be an additional 1.25 percentage point contribution added to both employee and employer National Insurance from April, as well as a similar additional charge on dividends. This is referred to as the Health and Social Care Levy. From April 2023 it will be extended to employees above the state pension age. We must hope that this money goes where intended and is not swallowed up in general taxation.

These changes have already proven controversial given the state of personal finances across the country. However, the changes will not end there. Last November the Treasury issued a raft of consultations which are likely to end up with several tax changes.

1) Greater scrutiny of the self-employed

In advance of Making Tax Digital the Government wants to ensure those entering self-employment or becoming new landlords are identified early. Currently their obligation is to notify HM Revenue & Customs when they have a tax liability.

However, the Government is concerned that some fail to do so and they want people to register formally with HMRC. Those affected will have enough to worry about when starting a new business, so it is vital that HMRC gives plenty of publicity to this change and provides sufficient support when the time comes.

2) Earlier tax collection

Another area of concern for HMRC is “timely payment”, but in reality I suspect this is really about collecting tax earlier. As the document says: ”timely payment refers to bringing the calculation and payment of tax closer to the point where the income or profit arises”. 

Although this is just a consultation at this stage, for a Government short of money it must be tempting to press ahead and raise funds sooner.

3) Penalties for Isa misuse

If you are one of the 11 million people who invest in Individual Savings Accounts, changes to Isa compliance and penalties could be afoot. The Government was understandably alarmed by the collapse of the London Capital & Finance (LCF) investment firm in 2019 and concerned about poor supervision and regulation of its accounts. 

In December 2020 it announced that “the Treasury is urgently looking at the sufficiency of checks on “innovative finance” Isa managers and the penalties regime”. It has warned that some Isa managers have repeatedly breached the rules but are prepared to pay a penalty rather than fix their systemic problems. The Treasury has said, understandably, that this is not robust enough. 

Most of us naturally assume our Isa managers take care to comply with the rules. Clearly it would be a disaster for investors if a fund was voided and investors hit with unexpected tax bills. I would support tougher compliance penalties on the managers if it prevented this.

How about some more positive news?

The Government has accepted the recommendation of the Office of Tax Simplification that it was unreasonable to ask taxpayers selling residential property to report their gains to HMRC within 30 days. 

The period has now doubled to 60 days. However, I would like to see an assurance from HMRC that it has finally sorted out its online reporting system. For reasons that escape me, this system runs independently of self-assessment. It requires separate registration and a separate tax payment arrangement. In addition, agents are prevented from reporting gains for their clients in the normal way. I am not alone when attempting to file information online to be told “sorry, we are experiencing technical problems”. This needs to be sorted out.

The Government has accepted another recommendation from the Office of Tax Simplification to extend pension tax relief for low earners caught under the “net pay” arrangement. 

It is manifestly unfair that those earning below the personal allowance can obtain a Government top up to their pension fund if they get tax relief at source where others on net pay, in particular women, do not. Since it was also a manifesto commitment it is disappointing that it has taken so long for this anomaly to be dealt with. Even then it is only a partial solution and frustratingly it will not apply for pension contributions until April 2024.

Tax Hacks is written by Mike Warburton, previously a tax director with accountants Grant Thornton, and is published twice a month on Tuesdays. You can email Mike on taxhacks@telegraph.co.uk