This report highlights some of the Tax Faculty’s activities since the July report on 1 August 2017, and what we are working on at the moment.
The anticipated Summer Finance Bill (Finance Bill 2017-19), containing the measures dropped when the general election was called, was published on Friday 8 September 2017. At 674 pages, the Bill is once again a blockbuster. We shall be providing briefings to MPs and making representations. Government has also announced that draft clauses for the next Finance Bill will be published on 13 September with a six week deadline in which to comment, so the Tax Faculty will be very busy.
A team of volunteers and Peter Bickley met HMRC to discuss the practical implementation of the disguised remuneration contractor loan charge following changes which are now contained in FB 2017-19. We also met HMRC jointly with CIOT to discuss the implications of the Rangers Football Club disguised remuneration Supreme Court judgment.
A Tax Faculty team briefed the Labour shadow team on aspects of the tax system. The background theme was the need for the tax system to be fair and proportionate. We discussed legislation which can only work when there is also HMRC guidance, digitalisation of the tax system, the taxation of work and how concepts which should be easy turn out to be much more complex than is necessary.
Daily Express online – quote from Frank Haskew on tax fines (13/8)
Daily Express – quote from Frank Haskew on tax fines (14/8)
FT.com – reference to ICAEW consultation response on disguised remuneration (16/8)
Daily Telegraph – quote from Sarah Ghaffari on Making Tax Digital (15/8)
Financial Times – reference to ICAEW consultation response on disguised remuneration (21/8)
Work has continued on promoting the HMRC online agent forum and holding HMRC to account on the issues raised by agents. The next meeting of PTC is in mid-September. HMRC’s agent strategy and services continue to be hot topics and were discussed at the JISG meeting in July. Frank Haskew and Caroline Miskin have been preparing a webinar on these subjects which is scheduled for 5 September 2017.
Making Tax Digital
We have not yet seen the expected increase in HMRC activity on MTD following the government announcement on 13 July but meetings have restarted after the general election hiatus. Caroline Miskin attended an MTD forum on 30 August 2017 which mainly covered MTD for individuals. Neil Gaskell and Caroline Miskin attended a forum on MTD for large and complex businesses on 24 August 2017. Anita Monteith is due to attend an MTD stakeholder forum on 4 September 2017. Engagement will increase once the draft legislation and regulations are published.
SME business tax
The SME business tax committee submitted comments on the distributions in a winding up guidance, see ICAEW rep 87/17. Volunteers met with HMRC to discuss the implications of s77A Finance Act 1986 (stamp duty: acquisition of target company’s share capital). The next SME committee meeting is on 18 September 2017.
In this issue of the Tax Faculty's monthly magazine: Nigel Holmes of tax relief specialist Catax considered research and development tax relief in the UK; Anita Monteith considered the UK’s tax base, where the UK’s income is going to come from in future, and what debt we may be leaving future generations; Gillian Banks of PwC explained the First-tier Tribunal case of Higgins v HMRC (2017); and Robert Lillycrop highlighted some traps when determining the CGT base cost of an inherited asset.
The Tax Faculty’s deputy chairman, Mary Monfries, discussed the role of tax in economic and social progress; Ian Young reported on tax and Brexit so far; Jason Collins of Pinsent Masons explained the rules for the new corporate criminal offence of failure to prevent the facilitation of tax evasion; and Seb Purbrick of EY considered cross-border employment tax issues.
The following TAXguides have been published since the last report:
TAXguide 16/17 – Employment intermediaries
TAXguide 15/17 – Inheritance tax - business property relief and groups of companies
TAXguide 14/17 – Personal tax refresher
TAXguide 13/17 – Trusts and mandated income
Tax Faculty Webinars and TAXtalk
Personal tax webinar
Following on from the success of our practical webinar in 2016 this webinar recapped how the personal allowance (PA), starting rate band, personal savings allowance (PSA) and dividend allowance interact with one another using illustrative examples. The webinar also highlighted individuals who will need to file a paper return for 2016/17 following problems with HMRC software not taking into account the various permutations of the PA, PSA and dividend allowance. Sarah Ghaffari and Sue Moore also considered the rules for the two new £1,000 allowances for trading and property income which were introduced on 6 April 2017 and highlighted the changes to pension contributions and how the new rules work.
FRS102: What are the tax implications
Sarah Ghaffari and Sharon Cooke, London Director of SWAT, gave a practical and informative webinar which considered how the introduction of FRS 102 will affect the tax computation.
TAXtalk resumes at 12.30 on 13 September 2017 after a break in August. We will be reviewing the Finance Bill(s) and looking at the other tax areas still under consultation.
Tax Club resumes on Monday 11 September 2017 when Pete Miller will give an update on reconstructions and the phoenixism TAAR.
The following formal representations were submitted in August 2017:
ICAEW REP 93/17
Suggestions for VAT reform to all party parliamentary group
ICAEW REP 87/17
Distributions in a winding up - comments on published guidance
ICAEW REP 86/17
Anti-money laundering supervision: a new regulatory body
Consultations on which responses are being developed by committee volunteers and faculty technical managers are as listed below. We would welcome your comments well before the issuing body’s deadline so we have time to consider them:
Suggestions for Budget Autumn 2017
22 September 2017
Loss relief carry forward draft guidance
25 September 2017
Welsh Revenue Authority tax crime criminal powers
2 October 2017
Wales small business rate relief
13 October 2017
Corporate interest restriction draft guidance
31 October 2017