What we have been working on and what we are doing now.
This report highlights some of the Tax Faculty’s activities since the last report published in December 2017, and what we are working on at the moment.
The Tax Faculty has been working on Finance Bill 2017-18 published on 1 December 2017. The Bill has now completed its detailed committee stage and the Tax Faculty submitted six briefings to MPs on various provisions in the Bill: these are detailed on our Tax Representation pages, as well as on the Parliamentary website. Our submissions were mentioned on three separate occasions in the first and fifth Public Bill Committee Hearings.
We have been working on a number of new consultation documents which are listed below.
We have also been dealing with the repercussions of the Trust Registration Service including negotiating for more time in which to register trusts.
2. Significant meetings and other activity
On 9 January 2018 ICAEW hosted a meeting to discuss the HMRC consultation on late payment penalties and interest (part of the MTD project) which was attended by HMRC and HM Treasury staff responsible for this policy and volunteers.
On 23 January 2018 ICAEW hosted a meeting of the VAT Practitioners Group which was attended by the HMRC team responsible for the MTD for VAT legislation.
We have continued to help develop guidance for the Brexit hub at ICAEW.com/Brexit. The content we have contributed so far is largely on explaining the VAT position for cross border trade within and outside the EU as it is currently and explaining how this might change after March 2019. We are working on similar guidance for employment taxes.
The Reward and Employment Engagement Group (a cross-body group of payroll professionals, including software developers, chaired by one of our volunteers) met on 16 January and was joined by HMRC. Topics discussed included dynamic coding, the RTI post-implementation review, payroll test data, Scottish rates, PAYE settlement agreements and auto-enrolment.
We have been considering the government’s response (published on 7 February with four consultation documents) to Matthew Taylor’s ‘Good Work’ report on modern working practices. The response and consultations focus on rights for workers but we believe that no study of this area is complete unless it covers tax and NIC as well.
On 23 January Anita Monteith participated in a round table discussion hosted by the Reform think tank and chaired by Anneliese Dodds MP on building a sustainable tax base.
We have also participated in policy level meetings to discuss how self-funded tax relief for training might be designed and also the current call for evidence on the policy intent of the rent-a-room relief.
We launched a new part of our website Tax topics for today to provide thought provoking insight into key current tax issues. We moved some existing pieces from other parts of the website and published a new piece on the benefits, or otherwise, of hypothecation of taxes.
3. Media and other public appearances
Jane Moore appeared on the BBC’s Moneybox on Saturday 6 January, talking about how to pay tax and the effects of HMRC no longer accepting personal credit cards.
Anita Monteith appeared on Moneybox on Saturday 27 January explaining the High Income Child Benefit Charge and how it affects entitlement to a state pension.
Sue Moore delivered the keynote speech at the seminars held by FT Adviser entitled ‘Tax Efficient Investing’, held in Birmingham and London.
4. News from the technical committees
Members in practice have inevitably been focused on the self assessment deadline. The Tax Faculty has been monitoring a number of widespread self assessment issues and taking these up with HMRC (see self assessment glitches).
Issues with the Trust Registration Service have caused considerable difficulties for agents. This has necessitated a considerable amount of work by Sue Moore on the service itself and Caroline Miskin on the Agent Services Account aspects.
Making Tax Digital
The MTD for VAT regulations were published on 18 December 2017. The Tax Faculty submitted comments on these draft regulations on 9 February 2018 following engagement with members. This engagement included a meeting of the VAT practitioners group at CAH which was attended by the HMRC team responsible for the MTD for VAT legislation. Caroline Miskin and Sally Ferguson represented ICAEW at a meeting of the Assisted Digital Working Group on 15 December 2017.
We are continuing to work with ICAEW colleagues in professional standards to publish a restructured Professional Conduct in Relation to Taxation (PCRT) based on around a ‘core’ PCRT (which will be existing chapters 1 and 2 – the fundamental principles and standards) with hyperlinks to the remaining chapters of the current PCRT (chapters 3 to 11) which will become helpsheets supporting the core PCRT. Legal counsel has confirmed that the regulatory effect of the restructured PCRT is the same as the existing PCRT and we are waiting final clearance from HMRC before we publish the PCRT in its new form.
TAXline: January 2018
In this issue, Chairman Carl Bayley looks to the year ahead, Lindsey Wicks examines the Finance (No. 2) Act 2017, Lynnette Bober looks at the new protection legislation for overseas trusts and Sue Moore explains what practitioners need to know about the Trust Registration Service.
TAXline: February 2018
February’s issue includes a summary of what’s in Finance Bill 2017-18 by Lindsey Wicks, an examination of tax and human rights in the UK and Europe by Robin Williamson, a summary of employment tax changes from April 2018, and a consideration of the Public Accounts Committee’s report on HMRC’s performance.
The following TAXguides have been published since the last report:
TAXguide 01/18: Construction industry scheme: a practical guide
In TAXguide 01/18 Howard Royse provides an overview of the construction industry and explains the verification process and what gross payment status means.
TAXguide 02/18: Demystifying MTD - the VAT requirements
In TAXguide 02/18, Sarah Ghaffari answers a selection of the key questions raised by viewers of the Tax Faculty webinar ‘Demystifying Making Tax Digital: the VAT requirements’, broadcast on 16 January 2018.
Tax Faculty webinars and TAXtalk
The Tax Faculty has run two webinars since the last report:
Demystifying MTD the VAT requirements
HMRC's vision for a digital tax system is well underway. The Tax Faculty talks through the current state of play and explain what we know so far about the requirements for VAT.
Employment taxes round up
Kate Upcraft and Peter Bickley presented a webinar on 13 February about current payroll issues, covering off-payroll working, Scottish tax, RTI, dynamic coding, optional remuneration arrangements, childcare support from April 2018, auto-enrolment and termination payments. We shall be publishing the Q&As in a TAXguide.
Monthly TAXtalks (12:30 on the second Wednesday of each month) have also continued.
Tax Club has not met since the last report. The next meeting is scheduled for 26 February 2018.
7. Representations and consultations
Tax representations submitted
The following representations have been submitted since the last report:
ICAEW REP 134/17
Tax relief for tangible fixed assets using accounts depreciation
ICAEW REP 136/17
Traffic light assessment Autumn Budget 2017
ICAEW REP 137/17
Finance Bill 2017-18 Clause 35 and Schedule 10 – Offshore trusts
ICAEW Rep 141/17
Finance Bill 2017-18 Hybrids and other mismatches
ICAEW Rep 142/17
Finance Bill 2017-18 Clause 10 – Termination payments - foreign service
ICAEW Rep 143/17
Finance Bill 2017-18 Clauses 11-12 Schedules 1-2 – Disguised remuneration
ICAEW Rep 145/17
Finance Bill 2017-18 Clause 38 Value Added Tax – Online marketplaces
ICAEW Rep 03/18
Finance Bill 2017-18 Clause 18 and Schedule 6 – Partnerships
ICAEW Rep 11/18
Fair taxation of the digital economy
ICAEW Rep 12/18
Corporate tax and the digital economy
ICAEW Rep 15/18
PAYE: real time information post-implementation review
ICAEW Rep 16/18
Termination payments guidance on new tax NIC rules
ICAEW Rep 18/18
MTD – Draft value added tax (amendment) regulations and notice 2018
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:
Gains by non-residents on UK immovable property
PAYE settlement agreements
Rent a room relief call for evidence
Royalty withholding tax
VAT and vouchers
Corporate interest restriction: leases
Plant and machinery lease accounting changes
MTD: interest harmonisation and sanctions for late payment
Tackling the hidden economy: public sector licensing
Good Work: employment status