This report highlights some of the Tax Faculty’s activities since the last report to 12 August 2019, and what we are working on at the moment.
Activity has centred on two main topics: Brexit and Off Payroll Working.
Activity on Off Payroll Working has included a meeting and other discussions with HMRC including on its check employment status tool, a response to the draft legislation published in July, a webinar (arising from which a Q&As TAXguide is being finalised) and an ultimate TAXguide summarising our current understanding of the new rules.
The Tax Faculty has contributed to the significantly increased ICAEW activity on Brexit including additional content on the Brexit hub and webinars.
The Tax Faculty gave oral evidence, and also responded to a request to provide written evidence, to the review into the Contractor Loan Charge being led by Sir Amyas Morse.
The deadlines for the first mandatory MTD for VAT quarterly returns on 7 August, September and October 2019 came and went fairly quietly which we like to think was in part due to the support provided to members through the MTD hub and webinars.
2. Significant meetings and other activity
Review of the contractor loan charge On 11 September 2019 the Government announced an independent review into the loan charge chaired by Sir Amyas Morse. On 16 September 2019 we met with Sir Amyas to outline our concerns with the loan charge. We referred him to the history behind its introduction and the fact that the FA 2011 changes were designed to put a stop to contractor loans but did not do so, resulting in the loan charge in the FA 2017. We followed up our meetings with a letter where we referred to our earlier concerns about the lack of proper scrutiny of this controversial charge and the need for all taxpayers to be treated fairly, especially those who had come forward and had settled with HMRC.
MTD The Tax Faculty was represented at meetings of the ICAEW MTD software advisory group (SAG) on 14 August and 9 October 2019. On 26 September 2019 Caroline Miskin spoke an AccountIQ MTD event.
Joint Initiative Steering Group (JISG)Frank Haskew and Caroline Miskin attended a special meeting of the Joint Initiative Steering Group on 25 September 2019. This meeting focused on how HMRC engages with professional bodies and other stakeholders and a number of recommendations including the setting up of a new sub-group on the delivery of agent services including agent registration, authentication and authorisation. 3. News from the committees
Technical CommitteeTechnical Committee met on 13 August and 18 September 2019. Topics discussed included the draft Finance Bill legislation, in particular off-payrolling, CGT main residence relief and reinstatement of HMRC as a preferential creditor in insolvency, recent OTS work, disclosable cross-border business arrangements (DAC6), making tax digital, tax policy making, and HMRC powers, agent strategy and customer service.
Employment taxes and NICETNICC met on 17 September 2019. HMRC attended part of the meeting to discuss off payrolling including CEST. Other topics discussed (without HMRC) included Good Work, contractor loans, state aid and employment allowance, personal allowances and cross-border social security contributions after Brexit, and code numbers (especially C codes).
Practitioner taxPTC met on 4 September 2019 with three guests from HMRC and focused on agent services.
The Tax Faculty continues to follow up HMRC service issues through regular HMRC forums including the online agent forum, Virtual Communications Group, Issues Overview Group, Joint Initiative Steering Group, Compliance Reform Forum and Employment & Payroll Group. HMRC’s service standards remain a cause for concern, with problems reported in a number of areas including the answering the VAT and CT Helplines and the long delays in processing of R & D claims and some IHT forms. We continue to monitor service problems as they arise and take them up with HMRC.
Private client PCC met on 3 October 2019. There was a general discussion about the upcoming changes to CGT and residential property and how to keep members informed of the new rules so watch this space as we roll out information in the new year.
Large business and international taxLarge Business and International Tax Committee met on 12 September. DAC6 and ICAEW’s response to the Digital Services Tax consultation were considered. Implementation of the new rules for off payroll working by large entities were also discussed.
Making Tax DigitalThe deadlines for the first mandatory MTD for VAT quarterly returns on 7 August, September and October 2019 came and went fairly quietly which we like to think was in part due to the support provided to members through the MTD hub and webinars. The number of MTD related queries from members has reduced.
The ICAEW MTD hub www.icaew.com/mtd is updated regularly and supplemented with news items in TAXwire.
The Tax Faculty has continued to engage with HMRC on MTD through the Software Advisory Group, the Joint VAT Consultative MTD sub-committee and the Additional Needs Working Group, providing feedback from members and obtaining clarity on a number of areas of technical uncertainty. This engagement has included an ICAEW led working group on issues around the agent services account and sign-up processes which are causing most difficulty. This group has now largely completed its work achieving some significant improvements and some of the longer term issues are expected to be picked up by the new agent services sub-group of JISG.
4. PublicationsTAXlineTAXline: October 2019 • Iain Wright, ICAEW director for Business and Industrial Strategy provides insight into tax policy creation;• Sarah Bradford considers the tax treatment of employees working from home;• Tony Monger reflects on a decade of the senior accounting officer regime;• the cover story by Sofia Thomas considers the role that advisers can play in preventing economic abuse;• Neil Warren reviews a recent tribunal decision on the VAT partial exemption; and• the final set of reports from the Tax Faculty’s conference, deadlines and dates for your diary, and our popular Practical Points section.
TAXline: September 2019• Angela Clegg examines HMRC’s use of nudge theory;• Andrew Cockman explains the implications of the First-tier Tribunal decision in Stephen Warshaw v HMRC on entrepreneurs’ relief;• Graeme Blair guides readers through the changes to HMRC’s guidance on partnership expenses;• Sue Moore reports on key recommendations from the OTS report on simplifying inheritance tax;• Wendy Nicholls and David Green discuss the ambitious OECD workplan on taxing multinationals; and• the first set of reports from the Tax Faculty’s conference, deadlines and dates for your diary, and our popular Practical Points section.
TAXguidesThe following TAXguides have been published since the last report:
TAXguide 14/19: IR35/off payrolling: new tax rulesThis TAXguide explains our current understanding of the new off-payroll working rules beginning on 06 April 2020 and their implementation.
TAXguide 13/19: Entrepreneurs' relief: further questions on Finance Act 2019 changes Following the publication of TAXguide 04/19 ENTREPRENEURS’ RELIEF: Clarification of the new ‘5% proceeds test’ inserted by Finance Act 2019 - questions on scope of the new provisions along with HMRC responses, further questions have arisen on the Finance Act 2019 entrepreneurs’ relief legislation.
TAXguide 12/19: Supplementary anti-money-laundering guidance for tax practitionersGuidance for those providing tax services in the United Kingdom on the prevention of money laundering and the countering of terrorist financing.
BrexitThe Tax Faculty is actively involved in producing content and providing information for the tax section of the ICAEW Brexit hub (see https://www.icaew.com/technical/economy/brexit) and in a series of Brexit webinars.
5. EventsTax Faculty Webinars and TAXbites The following webinars have been produced since the last update:
DAC6: EU Mandatory Disclosure Regime04-10-2019 This webinar addresses the practical issues raised by the introduction of the Finance Act 2019, including challenges for tax advisers, how firms are approaching compliance and an overview of the challenges for tax payers.
Entrepreneurs' relief - the recent changes25-09-2019 This webinar considers the changes introduced in Finance Act 2019, practical issues concerning options, and the ongoing problems regarding the definition of ordinary share capital and what is a personal company.
Simplification of tax reporting and payment arrangements for the self-employed and landlords20-09-2019 In this webinar we are joined by the Office of Tax Simplification to discuss the OTS document which sets out the scope of a new project around simplifying the tax reporting and payment arrangements for the self-employed and landlords of private residential property.
Compliance13-09-2019 As HMRC continues to tackle tax evasion and avoidance, it has an ever-expanding range of powers and procedures at its disposal. Tax investigations experts John Cassidy and Hayley Ives explain the latest compliance developments, both in the UK and the international arena.
All Tax Faculty webinars and events, including past ones, can be found on a dedicated events page.
6. Representations and ConsultationsTax representations submitted
The following formal representations have been submitted since the last report:
ICAEW REP 102/19 Written submission to Independent Loan Charge Review Response dated 30 September 2019 to a call for evidence to the Independent Loan Charge Review launched by the Chancellor on 11 September 2019.
ICAEW REP 101/19 Simplification of partial exemption and capital goods schemeResponse dated 26 September 2019 to a consultation published by HMRC on 18 July 2019.
ICAEW REP 91/19 Changes to ancillary reliefs in capital gains tax private residence reliefResponse dated 5 September 2019 to a consultation published by HMRC on 11 July 2019.
ICAEW REP 90/19 IHT and excluded property added to and transferred between trustsResponse dated 5 September 2019 to a consultation published by HMRC on 11 July 2019.
ICAEW REP 88/19 Changes on tax abuse using company insolvenciesResponse dated 5 September 2019 to a consultation published by HMRC on 11 July 2019.
ICAEW REP 87/19 Digital services taxResponse dated 5 September 2019 to a consultation published by HMRC on 11 July 2019.
ICAEW REP 86/19 Off-payroll working from April 2020Response dated 5 September 2019 to a consultation published by HMRC on 11 July 2019.
ICAEW REP 84/19 Employment allowance and de minimis state aidResponse dated 20 August 2019 to a consultation published by HMRC on 26 June 2019.
Open consultationsBEPS inclusive framework: Pillar OneOECD 9.10.19 Deadline 12.11.19http://www.oecd.org/tax/beps/oecd-invites-public-input-on-the-secretariat-proposal-for-a-unified-approach-under-pillar-one.htm
A local transient visitor levy or tourist taxScots Gov’t 9.9.19 Deadline 2.12.19https://consult.gov.scot/local-government-and-communities/visitor-levy/
Deposit and return scheme for Scotland Scots Gov’t 10.9.19 D2L Deadline 10.12.19https://consult.gov.scot/environment-forestry/deposit-scheme-for-scotland/