Brexit challenges and good communication

Chartered Accountants Croydon President Andrew McKenzie-Smart considers the challenges facing taxpayers in the wake of Brexit and MTD, a potential breakdown in communications and how the current situation reminds him of ‘Yes, Minister’.

October 2018

Recently, I attended the LSCA dinner, where leading Brexiteer, Jacob Rees-Mogg delivered a coherent analysis of the current impasse in the Brexit negotiations with the EU. I have also sat on a national Working Together committee meeting where we discussed the challenge of providing a useful dialogue with HMRC regarding the issues facing tax payers.

Finally, I also listened to a summary of the work being done by the Office of Tax Simplification to improve tax administration in the UK, by making it more intelligible.

While each of these are very different challenges, and of differing gravity, they are all important.

Rees-Mogg set out his views on the benefits of leaving the EU; even if the negotiations to exit were inconclusive and no deal was achieved by the deadlines set. HMRC and much of government is, I understand, taken up with the impact of leaving the EU, and rightly so.

The changes to the UK economy and society will need to be carefully managed to ensure that the benefits from leaving the EU outlined by Rees-Mogg are obtained. HMRC and the Treasury are therefore reviewing the impact of leaving the EU on our direct and indirect tax legislation, our rates and duties from international trade and, additionally, on our monetary system.

This review is vital and we need to have a working dialogue with the government to ensure that changes and issues of those affected are listened to. From my recent Working Together committee meeting, I am aware that the high-level dialogue between the professional bodies and with government continues.

But it seems to me that lower down the system such interaction is no longer operating effectively. The Working Together forum was a local initiative to develop ties between tax agents and the tax authority to identify issues and to pass them on to be addressed. Sadly, with reorganisation of HMRC and additionally with changes to client interaction, the forum has become almost entirely online via the Agent Forum.

The challenge, though, is that the impact of Brexit and from Making Tax Digital will hit individual tax payers and their businesses, the very people that Jacob Rees-Mogg and others are expecting to look for new markets and products to benefit from leaving the EU. Working Together is the forum which the tax impact from such changes can be communicated through.

As part of leaving the EU, it occurred to me that the OTS should be developed so that changes arising from Brexit are considered carefully. There would appear to be a need for a Department for Administrative Affairs.

But having listened to the re-runs of Yes, Minister on Radio 4 over the summer, and in light of current EU negotiations, I have wondered whether the Department for Exiting the EU is just a renamed Department of Administrative Affairs!

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